IT stocks tumble as Credit Suisse warns of valuation-led correction

Indian IT valuations, the brokerage and research house argues, are at large premium to history despite material correction from the top

Shares of information technology (IT) companies slipped in trade on Friday after Credit Suisse warned of a 10 – 27 per cent valuation-led correction in these stocks amid US macro headwinds. The Nifty IT index lost over 3 per cent in intra-day trade with frontline stocks such as HCL Technologies (HCL Tech), Mphasis, Tech Mahindra and Infosys slipping between 3 per cent and 7 per cent.

Indian IT valuations, the brokerage and research house argued, are at large premium to history despite material correction from the top. Their analysis of six large correction cycles for the Indian IT sector suggests