July 2, 2012 / 7:11 AM / 5 years ago

Macquarie cuts ratings of TCS, Infosys, Wipro

Reuters Market Eye - Macquarie Equities Research has downgraded IT services sector to “underweight” from “overweight” citing demand concerns as Infosys (INFY.NS), which already has 30 percent of staff on the bench, delays joining dates for new hires.

Workers are seen at their workstations on the floor of an outsourcing centre in Bangalore, February 29, 2012. REUTERS/Vivek Prakash/Files

Given the bearish outlook, Macquarie has cut ratings on India’s top three software exporters Tata Consultancy Services (TCS.NS), Infosys and Wipro (WIPR.NS) to “underperform”.

The brokerage has also removed TCS from its Top-10 list, replacing it with ICICI Bank (ICBK.NS).

Infosys is delaying taking on board some of its planned 28,000 new recruits until mid-2013, underlining the slowdown faced by India’s No. 2 software services company, Indian media had reported last month.

Macquarie goes “overweight” on industrials from “neutral,” reflecting its growing optimism about a pickup in infrastructure spending, cut in interest rates and possible appreciation of rupee.

Among other changes, the brokerage has added Bharat Heavy Electricals (BHEL.NS), Hindustan Petroleum Corp (HPCL.NS), Asian Paints (ASPN.NS) and Wockhardt (WCKH.NS) to its model portfolio while removing Housing Development Finance Corp (HDFC.NS) and MindTree (MINT.NS).

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