Cautious outlook

The information technology (IT) industry is making a comeback in terms of popularity. But the Q1FY24 (April-June 2023) financials and the guidance received don’t seem to justify this. Management guidance by industry leaders — Tata Consultancy Services (TCS), Wipro, HCLTech, and Infosys — can be termed mildly, or at best cautiously, optimistic. However, investors have pushed up the IT index by 5 per cent in the past week after absorbing available Q1FY24 results and guidance. This could be classified as a relief rally because worse was expected. Some investors may also be simply over-optimistic, given the general momentum. The panic about macro weakness across North America and the European Union has declined. That’s good news. Churn has reduced. But there’s