Tech industry going through multi-year spending cycle, says Wedbush’s Moshe Katri

Infosys and Wipro delivered Q3 results. Infosys almost doubled its revenue growth guidance to 4-5 percent after beating expectations on almost all parameters. Wipro’s dollar revenue growth is the highest in nine years.

The tech industry is going through the beginning of a multi-year spending cycle, said Moshe Katri, MD of Wedbush Securities, on Thursday.

Speaking to CNBC-TV18, Katri said, “We have seen some of that reflected in the results in the past few quarters and we believe we will start seeing that spending cycle converting or translating into better growth during the next year or two.”

“We expect constant currency growth of 11-12 percent from Infosys in FY22,” he said. According to him, Infosys’ valuations are not expensive relative to the market given the actual improved growth.

On Wipro and other IT stocks, Katri said, “Wipro still needs to show that it can grow in-line with the industry. We do not cover TCS but we do cover Infosys. We raised our price target from USD 20 per share to USD 25 per share,” he said.