(Bloomberg) -- Recession fears have driven analysts to their most bearish on Indian information-technology sector bellwether Infosys Ltd. since uncertainties surrounding Brexit rocked the more than $200 billion sector six years ago.

Around one-in-five analysts covering the company rate it a sell, the highest proportion since September 2017, data compiled by Bloomberg show. The stock is down 15% so far in 2023 on concerns over an earnings slowdown, making it the worst performer on the NSE Nifty 50 Index after Adani Enterprises Ltd.

At least seven analysts downgraded the stock to sell since mid-March amid concerns of lower IT spending by US lenders due to concerns over regional bank health. Infosys’s disappointing sales forecast for the current financial year added to the negative newsflow.

Tech Bellwether Infosys Warns of Trouble in Key Finance Sectors

“A possible sequential decline in 1Q and potential guidance cut down the line could weigh on the stock near term,” JM Financial Services Ltd. analyst Abhishek Kumar, wrote in a note Wednesday. Kumar warned that project cancellations, which weighed on the firm’s fourth-quarter performance, could lead to further revenue decline for the Bengaluru-based company.

Chirag Kachhadiya of Ashika Stock Broking Ltd. sees limited scope for better return on investment for Infosys investors given the likely lack of a share buyback for the next 12 months and the impact from headwinds in the US economy. 

That said, cheaper valuations and recent data points in the US have kept the majority of analysts bullish on the Indian IT firm. About 62% of the 47 firms tracking Infosys still have buy ratings on the stock.

The shares are now trading at around 20 times forward earnings estimates, which is in line with its 10-year average for the time since July 2020. Bulls may also derive comfort from Goldman Sachs this week lowering its estimate of US recession odds to 25% from 35% on waning banking-sector stress and the bipartisan agreement to suspend the nation’s debt limit.

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