Why Nikunj Dalmia Says "Don’t Hate IT Now" – A Deep Dive Into IT Stocks’ Resilience

Key Takeaways from ET NOW Editor-in-Chief’s Insight on IT Sector

In his latest Editor’s Take on April 17, 2025, Nikunj Dalmia, Editor-in-Chief of ET NOW, shared a thought-provoking perspective on IT stocks, stating: “Don’t hate IT now.” His comments come at a time when the IT sector has faced mixed sentiments due to tariff pressures and the AI disruption.

But what exactly did Dalmia mean? Let’s break it down.

IT Stocks: No Surprises, No Debt, No Risk of Collapse

Dalmia pointed out that IT companies are no longer the high-growth darlings they once were, but they are far from being sell-offs. Here’s why:

✔ Stable, Mature Businesses – Unlike startups or debt-heavy firms, IT giants like TCS, Infosys, and Wipro have strong cash reserves and consistent buyback policies, making them resilient.

✔ No Debt Burden – Most IT firms operate with minimal or zero debt, meaning they won’t collapse even in tough economic conditions.

✔ Buybacks Provide Support – Regular share buybacks act as a safety net, ensuring shareholder value even if growth slows.

Why IT Stocks Could See a Short-Term Bounce

Dalmia highlighted that while IT stocks may not be "screaming buys," they are approaching a tactical investment zone:

Valuations Are Reasonable – Except for TCS, which remains expensive, other IT stocks are near attractive levels.
Potential 4-5% Upside – A minor market shift could trigger a short-term rally in IT stocks.
Infosys Earnings Reaction – Dalmia advised waiting for Infosys’ results (expected soon) before making moves, as it could set the tone for the sector.

The AI & Tariff Impact – Already Priced In?

One of Dalmia’s key observations was:

“With IT, the surprise is that there is no surprise.”

What does this mean?

AI Disruption Fears – The market has already absorbed the risks of AI replacing traditional IT jobs.
Tariff Pressures Known – Global economic shifts and pricing pressures are no longer hidden risks.

Since these factors are already priced in, IT stocks may not face drastic downside from here.

Final Verdict: Should You Invest in IT Stocks Now?

Dalmia’s stance is cautiously optimistic:

✅ Not a Growth Play – Don’t expect skyrocketing returns, but stability.
✅ Value Buy Opportunity – If prices dip further, IT stocks could offer good entry points.
✅ Wait for Infosys Results – The next big trigger will be Infosys’ earnings report.