Infosys fell 8% to Rs.742 and is among the top five losers on the BSE in an otherwise very spirited market. The BSE IT Index is down over 3% with 26 of the 51 stocks covered in the sector, on a decline. Wipro, NIIT, TCS, Hexaware, HCL Tech, MPhasis, Tech Mahindra, all are down.
This stocks are reacting to a report put out by Kotak Securities saying that it has a cautious view on the sector as it see’s no short term benefit coming to the companies on account of the tax cuts.
The report says, “Benefit in FY20 will be modest to negligible since many avail tax exemption on SEZ profits in India. However, the benefit will be material in the medium term once the SEZ benefit fades away."
But the brokerage did say, “the companies that could potentially benefit in the near term are Infosys and Wipro, while the tax rate will remain largely unchanged for TCS and Mindtree.” Yet, all these stocks are down in the red currently.