infosys earnings: After Infosys result, there may be a sell-off in other IT stocks on Monday: Dipan Mehta

A very disappointing set came in from Infosys. And what does this do to your entire thesis on the IT sector? What should an investor do? Should they look at selling out? Should they not consider fresh buying at all? How are you looking at the sector?
Yes, it is a bit of a shock, the way the Infosys numbers have come. I think a lot of analysis will go into understanding what went wrong. But for the time being, I think it is best to stay away from the sector. The time to sell is gone because of the way the correction has taken place. Maybe, a couple of quarters more, the pain will be there and there could be a recovery soon thereafter. But some important figures like deal flow and all, I need to look at it more closely. But on the face of it, optically, yes, definitely a disappointment.

Do you think the investors on the Street will have the patience to wait for the recovery to pan out because for now, the commentary, at least that one we have with TCS, does not give any clarity with respect to when the recovery is likely to happen. Do you expect a sharp sell-off, a sharp negative reaction that people will start throwing in the towel?
I think a knee-jerk reaction on Monday will be a sell-off in other IT stocks. There’s no getting away from that. But the TCV wins is what needs to be tracked because if that is strong and if the balance order book position is decent, then that does provide earnings visibility.

Over the next few quarters, they should be able to improve their operating profit margins. But I think the more disappointing part of Infosys is definitely the guidance. At 4-7% constant currency, that is not going to enthuse many investors. So there is no other way to say that except that it is a big disappointment. And we may have to just ride out this negative wave in Infosys which will emerge on Monday onwards.