Infosys Ltd. was downgraded by at least four analysts in a single day after India's second-largest software exporter cut its annual sales forecast, deepening concerns over disruption from artificial intelligence.
Axis Capital Ltd., Arihant Capital Markets Ltd., and IIFL Capital Services Ltd. were among brokerages that lowered their ratings on Monday, data compiled by Bloomberg show. Three others reduced their recommendations over the weekend, pushing its consensus rating to 3.7 out of 5, the lowest since January 2024.
The downgrades for the sector's bellwether threatens to derail a nascent recovery in India's battered technology shares. The Nifty IT Index is on track for its best month since July, even as concerns mount over soaring debt levels being used to fund the global AI buildout.
Infosys cutting its annual sales forecast signals that a broad-based recovery in IT budgets has yet to materialize. Revenue will rise 1% to 2% on a constant-currency basis in the year through March 2027, the company said late Friday, versus analysts' estimates of just over 2%.
India's $280 billion-plus software services industry has been grappling with a slowdown, with companies limiting spending in the midst of geopolitical crises such as the Iran conflict, surging energy prices and elevated inflation.
Infosys shares have fallen 28% this year on ongoing concerns about its ability to weather AI disruption. The average target price from 44 analysts is 1,200 rupees. The stock tumbled about 3% to 1,132.2 rupees in early trading on Tuesday.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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