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Feb 16, 2026
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NEUTRAL
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Indian IT sector earnings are showing only modest single-digit growth, yet valuations are at a premium (20-22x). There is a disconnect between "modest growth" and "premium valuation." The narrative of AI disruption poses a threat to the traditional "seat-based" billing model of these firms. Without an extraordinary resurgence in demand, the multiples are difficult to justify. AVOID. Wait for mean reversion in valuations. If these companies successfully pivot to becoming essential AI-migration partners, sentiment could reverse quickly. |
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