EPAM Systems scare bruises IT stocks

Information technology stocks came under heavy pressure on Tuesday after US company EPAM Systems cut its current quarter and full-year revenue and profit forecasts.

In a swing session, 30-share BSE Sensex And elegant It managed to close in the green, but the Nifty IT Index closed down 1.88 percent. However, the BSE Smallcap index rose 0.42 percent and the Midcap index rose 0.29 percent.

All 10 stocks in the Nity IT index closed in the red, with Persistent Systems (down 4.31 percent), Coforge (3.84 percent) and Mpahsis (3.49 percent) falling sharply. HCL Technologies, Wipro, TCS and Infosys shares fell between 0.95 percent and 1.8 percent.

Steering parts

epam It lowered its revenue growth forecast for 2023 again and now expects a steady 2 percent decline in currency yields in the middle of the guided range. Kotak said the company has now lowered its 2023 revenue growth forecast by about 13 percent over two consecutive updates. The guidance downgrade was attributable to continued client warning about ‘construction’ spending, an assumed slower rate of pipeline conversion and some decrease in pipeline total.

“A slowdown in discretionary spending will have implications for Indian IT, with a potentially weak first quarter of FY24. We believe the recent rally in this sector has been before fundamentals.

“Slowdown Warning”

“A measure of Indian IT stocks fell by the most in seven weeks after US-peer EPAM Systems cut its revenue growth forecast, warning of a slowdown in deal-making,” he said.

ICICI Securities, which analyzed SaaS (Servicenow, Atlassian, Snowflake, Salesforce, Workday, etc.) and digital companies (EPAM, Globant, Endava), said clients focus on cost optimization and lower total cost of ownership (achievable by standardizing SaaS platforms) . “This is likely to be a positive for Indian IT service providers, many of whom have built integration capabilities around large SaaS vendors who would potentially benefit from the consolidation,” she said.

The sectoral indices that declined in the Bahrain Stock Exchange are BSEIT (1.66%), BSETeck (1.51%), metals (0.45%), oil and gas (0.08%), and consumer goods (0.02%). However, sectoral indices such as BSE Realty (1.25 per cent) autos (1.10 per cent), commodities (0.74 per cent), capital goods (0.61 per cent), and healthcare (0.59 per cent) finished in the green.