InvestorQ : How do you see the Coronavirus impacting IT stocks like Infosys and TCS as they have a lot of global travel and software operations involved?
Dawn Cherian made post

How do you see the Coronavirus impacting IT stocks like Infosys and TCS as they have a lot of global travel and software operations involved?

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Dilmini Mercia answered.
1 year ago
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IT stocks have been largely immune to the Coronavirus syndrome as they had robust order books and the virus had not spread much beyond China. However, with the virus spreading to other developed countries in America and Europe, the impact may be visible soon. With Covid-19 rearing its ugly head and the global economy facing renewed pressures, IT stocks are likely to face pressure. In fact, many IT analysts are already flagging risks to IT companies due to a slowdown in order flows. OECD has warned that global economic growth could halve in 2020 if the virus epidemic deepens. That is not great news for the large IT companies as it is likely to badly hit order flows. Of course, order backlog will cushion companies from sudden disruptions. However, business uncertainty is likely to slow execution. In the past stressed macro situations had compelled large customers to pull back on execution of large contracts. As of now that is not yet visible but analysts fear that large names like Infosys and TCS may soon feel the heat.

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