Stock prices of IT majors may sink if US faces recession: KIE

KOTAK INSTITUTIONAL EQUITIES (KIE) has projected a potential 18-35% decline in stock prices of IT companies from current levels if the US, a major market for these entities, faces a moderate recession in near term.

- PADMINI DHRUVARAJ

"We estimate a 22-38% downside to the current FVs (face value) and an 18-35% downside compared to CMPs (current market price) for stocks under coverage, assuming no tariff on services exports. TCS, Infosys, HCLTech and Coforge have lower downside," KIE said in its report, 'When do IT stocks bottom out in case of a recession?'

The Nifty IT index has declined nearly 25% in the last three months. Tariffs imposed by the US government are likely to indirectly impact the growth of IT companies, as global clients may further reduce discretionary technology spending amid economic pressures.