Overview
- The Nifty IT index fell roughly 1.6–2% on January 5, with Infosys and HCLTech down more than 2–3% as broader sector stocks traded lower.
- CLSA urged investors to trim IT exposure before Q3 FY26, warning that near-term earnings are likely to remain subdued.
- The firm downgraded HCLTech to Hold and reduced conviction on Tech Mahindra, removing it from its Focus List.
- CLSA kept its most bullish outlook on mid-cap names Persistent Systems, Coforge and LTIMindtree, projecting the strongest upside in its coverage.
- Estimates were recalibrated with EPS raised for most companies but constant-currency growth trimmed for large caps, while a weaker rupee was identified as an INR revenue tailwind and regional AI developments in Asia weighed on sentiment.