Downgrade (1) Mindtree to Neutral on greater risk/uncertainty of execution (portfolio/employee attrition) following the unsolicited acquisition, (2) Persistent to Neutral on Alliance Business uncertainty, and (3) eClerx to SELL (Neutral earlier). We prefer segment leaders which are available at reasonable valuations that include TCS (within Tier-1 IT), Mphasis (within midcap IT), L&T Tech (ER&D). Historical underperformers such as HCLT (in revival mode) and Zensar are tactical opportunities at attractive valuations (<12.5x FY21E). IT sectors growth vector is intact, however margin headwinds have increased based on the supply-side trifecta. Digital becoming non-discretionary can be an offset over medium-term with pricing power and better margins within the commoditised IT services. We recently attended the NASSCOM Technology & Leadership Forum and met multiple CXOs from IT services and Tech experts. The broad messaging was optimistic with digital opening multiple avenues for service providers as technologies (AI, automation, blockchain) evolve beyond its hype-cycle and business use-cases accelerate.