IT under pressure, Mphasis bucks trend; Trump tariff weighs on pharma: Mayuresh Joshi

Mayuresh Joshi, Head of Equity Research at William O'Neil India, expects the IT sector to undergo a phase of consolidation. He said a large part of the price correction in the segment is over, but multiple headwinds remain.

"The Street believes issues are still lingering, including the latest H-1B controversy. Alongside, the business model itself is under some element of pressure, given the rise of new AI platforms globally. This could impact new orders, margins, pricing, as well as the time and cost needed to develop platforms and upskill employees. To that extent, there are several challenges for the sector," Joshi told Business Today on Friday.

He noted that companies that are more proactive in adopting new technologies are likely to fare better. "The only stock we continue to hold in our global portfolio is Mphasis Ltd as it has been doing more on the AI front, which could support growth in the next few quarters," he said.

IT stocks have been under pressure after the White House announced a revised H-1B visa fee of $100,000. The Trump administration clarified that this will be a one-time fee, applicable to new petitions filed after September 21, 2025, and will not affect current visa holders.

Meanwhile, pharma stocks came under heavy selling today as US President Donald Trump announced a 100 per cent import tariff on branded or patented pharmaceutical products, effective October 1, 2025.

Commenting on the sector, Joshi said, "Trump's tariff and his rhetoric every now and then is not helping the market at all, and therefore we expect a rangebound move for the index. Earnings will be key, but Q2 is still likely to remain soft, with better commentaries expected in Q3 and Q4."