Infosys, Wipro downgraded to Sell yesterday at Investec

As previously reported yesterday pre-open, Investec analyst Nitin Padmanabhan downgraded both Infosys (INFY) and Wipro (WIT) to Sell from Hold with price targets of INR 1,720 and INR 530, respectively. The firm views the risk reward as unfavorable as it notes that the revenue growth compound annual growth rates required to meet current valuations, with expanded margins in most cases, is higher from FY24-FY35 than that seen over the past five years. The firm also points to Q3 as “the weakest quarter in the year” for India IT Services due to a lower number of working days, furloughs and U.S. elections, telling investors that it sees “no catalysts to support stocks at current valuations and remain cautious on the sector overall.”