At Portfolio, we have been re-iterating since January that while IT services companies have done an excellent job in the recession year of 2020-21, the disconnect between earnings/growth and valuations pose a risk. The stretched valuations of the sector versus historical levels, alongside earnings growth prospects for the long-term remaining moderate (high single-digit to low double-digit percentage growth), are reasons to stay broadly cautious on the sector. Generally, periods of excess returns…

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