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Below Quote on IT Sector outlook post the massive lay-offs By Vinod Nair, Head of Research at Geojit Financial Services.

"Major U.S. IT companies felt the burn of macroeconomic headwinds and prepared by trimming their employee strength through massive layoffs to improve margins. However, the revenue of the major Indian IT companies in the last quarter (Q2 FY23) was consistent with the estimates with healthy outlook commentary. The average margins of top IT companies expanded by 60bps on improving operational efficiencies. Despite the macroeconomic headwinds that prevailed in the global markets, most of the revenue was supported by cloud, engineering, and digital services. Going forward, healthy deals in the areas are estimated to drive growth. With fresh hires, a return to office policies, and improved cost-cutting measures, margins are likely to normalise in the coming quarters. After a major correction the valuation of IT stocks have moderated by 1/3^rd, which is marginally above average and accommodative on the long term basis though volatility can prevail in the short term due to global slowdown."

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