Shares of Wipro Ltd fell nearly 3 per cent in Thursday's trade and, at one point, was the worst Nifty performer. Infosys Ltd, HCL Technologies Ltd, Tech Mahindra Ltd (TechM) and Tata Consultancy Services Ltd (TCS) also fell amid a broader selloff in the market. Stocks fell amid a strong dollar after the US Fed hinted at lesser rate cuts in 2025.
Besides, there are concerns that healthcare segment, which has been the fastest-growing vertical for many IT firms, may see some near-term uncertainty as Donald Trump in his second term is likely to bring many changes to US healthcare policy, thus impacting healthcare spending.
Wipro fell 2.64 per cent to Rs 304.35. Infosys declined 2 per cent to Rs 1,940.05. HCL Tech slipped 1.67 per cent to Rs 1,927.55. TechM dropped 1.33 per cent to Rs 1,755.25. TCS edged 0.6 per cent lower to Rs 4,323.
Among IT firms, Persistent Systems has the highest reliance on the healthcare vertical with 28 per cent revenue contribution, followed by HCL Tech (16 per cent) and Wipro (14 per cent), MOFSL said.
"HCL Tech’s healthcare vertical has been slightly erratic (down 4 per cent QoQ in 1QFY25 followed by 3 per cent growth in 2QFY25), whereas for Wipro it has clocked an 8.5 per cent CAGR over the past two years, underscoring structural tailwinds in the sector," MOFSL said.
MOFSL said Trump's second term is likely to bring many changes to US healthcare policy, with a focus on repealing the Affordable Care Act (ACA), altering Medicaid funding mechanisms, and potentially reshaping drug pricing regulations.
"The healthcare industry is bracing for these shifts, indicating expectations of a more favorable environment for private insurers and Medicare Advantage plans. Trump's re-election is likely to have a mixed impact on providers and hospitals, which face challenges from reduced reimbursements and rising costs," it said.
MOFSL said the life sciences sector has a mixed outlook, with expedited FDA approvals boosting revenues but increased scrutiny on drug pricing pressuring margin.
"We would watch out for commentary on the vertical in the upcoming earnings season and a potential impact from the new administration in the US. While we expect growth to moderate in the short term, it should resume once policy clarity emerges in 1HCY25," MOFSL said.