Goldman Sachs, a big finance company, has lowered the price targets for tech companies in India by 3% to 32%. They did this because they think revenue growth will be lower due to uncertainty in the US economy. Since about 60% of Indian IT companies earn money from the US, changes in the US economy can have a big impact.
Goldman Sachs is worried about a possible recession in the US, which could be caused by trade tariffs (taxes on imports). They also noted that a major consulting firm, Accenture, has pointed out increased uncertainty in the business environment.
Because of this, they have changed their rating of LTIMindtree, a tech company, from ‘Buy’ to ‘Neutral’. This is because LTIMindtree relies heavily on US sales, making its growth outlook less impressive compared to others. Goldman believes Tata Consultancy Services is in a better position because it has diverse revenue sources and better profit margins.
Other companies like Wipro and Tech Mahindra might face more challenges because of slow growth. They are concerned that companies may delay or cut IT spending due to slower decision-making. This can lead to cancellations or changes in projects, which could hurt the overall IT business in India.
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