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J.P.Morgan on Tuesday placed Indian IT services provider HCL Technologies Ltd on "negative catalyst watch" ahead of the earnings season, citing the highest near-term risks for the company.

"We remain cautious on the IT sector as we see downside risks to earnings and multiples from the weak fourth quarter prints and FY24 guidance," the brokerage said in a note.

J.P.Morgan said it expects HCL to negatively surprise analyst expectations, while also seeing downside risks to demand and growth commentary for Tata Consultancy Services Ltd, which is India's top IT services provider, and Infosys Ltd, from financial year 2023-24.

"The lack of a stated target of double-digit revenue growth in FY24, an uncertain macro environment in addition to an unexpected CEO exit (for TCS), put estimates and multiples at risk, in our view," J.P.Morgan said.

The brokerage also expected Infosys to give "soft" guidance due to the uncertain macro environment and the departure of Mohit Joshi, its president and head of banking, financial services and insurance.

TCS Chief Executive Officer Rajesh Gopinathan resigned last month, while Joshi was named CEO of Tech Mahindra.

Earlier, J.P.Morgan had said TCS and Infosys have the highest exposure to regional banks in the United States that are gripped by a financial turmoil.

India's IT industry is facing a challenging macroeconomic environment in its key markets of Europe and the U.S., where technology spending is contracting amid delays in decision-making on long-term deals.

The Nifty IT index fell 3.3% in March, against a 0.3% growth in the benchmark Nifty 50 index, and J.P.Morgan expects this underperformance to continue on weak fourth quarter results and guidance for FY24.