IT sector may be ripe for cherry picking; analysts more positive on Infosys

Investors though should be selective; analysts more positive on Infosys and Persistent Systems

The information technology (IT) services industry could see value investors taking selective punts in the near future. While growth remains visible, managements across the board have been cautious or measured in their guidance and have also complained about a combination of margin pressures and high churn. 

The two factors are related in that employee compensation is a large component of IT costs and high churn has forced firms to hike compensation packages and also invest more in hiring, training, and retention. 

However, the valuations of IT companies have also fallen significantly as the industry has underperformed in the broader market.