TCS, Infy downgraded amid slowdown fears

Global Headwinds

- Pressure on global IT spend

- IT cos feeling margin pressure

- IT firms reduced in bonus pay out

- Also reduced variable pay

- However, many tier-1 mid-tier IT cos guided for double digit revenue growth in FY23

Bengaluru: Indian IT majors Tata Consultancy Services (TCS) and Infosys have been downgraded by global brokerage firm Goldman Sachs from 'buy' to 'sell' citing a potential slowdown in dollar revenue growth amid recessionary fears in the US and Europe.

Despite sharp correction in the share prices of these IT bellwethers, Goldman Sachs said valuations were still not factoring in the slowdown in revenue growth.

"We believe a slowdown in discretionary IT services spend around the growth and transformation agenda will be quite material and something not yet completely reflected in the street's double-digit revenue growth forecast for the industry for FY24," Goldman analysts said in a note.

Most tier-1 IT firms and mid-tier IT services companies have guided for double digit revenue growth in the current financial year.