Disappointing results and pessimistic guidance from Tata Consultancy Services (TCS) and Infosys have spooked investors across the IT services sector. There has been a sharp sell-off across IT stocks, including those that have not yet delivered their Q4 (January-March 2023) results. The Nifty IT index declined by 4.7 per cent on Monday as every stock in the index lost at least 1.5 per cent, and the biggest loser, Infosys, was down by over 9 per cent. While this may seem like an over-reaction, there’s consensus FY24 will see little if any revenue growth across the industry, and earnings estimates are being broadly downgraded. Given this scenario, investors are also likely to reduce valuation multiples.