Jefferies Report: Margin Expansion of IT Cos. in FY25 Faces Significant Hurdles
Jefferies' latest report casts doubt on the anticipated expansion of EBIT margins for IT companies in FY25. The consensus expectation is an 80 basis points year-on-year increase, reaching 20.3% for the sector. However, while there’s optimism for a significant 380bps improvement in) , the outlook for other IT firms suggests only a modest 20-80bps rise. Jefferies highlights several challenges that may prevent these margins from expanding as expected, posing potential risks to earnings.).
However, utilizing fair value metrics, which adjusts with market developments, can help investors make timely decisions. Once a stock's fair value surpasses its CMP, it might be prudent for investors to consider booking profits and reallocating their investments to companies with more favorable valuation gaps.
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