Macquarie Equities Research has downgraded the IT services sector stocks to "underweight" from "overweight".

The brokerage firm has said that there are demand concerns after Infosys, which has 30 per cent staff on the bench, delayed joining of new employees.

Bangalore-based, Infosys has announced a delay in taking on board some of its planned 28,000 new employees till mid next year.

Macquarie reduced ratings for India's top three software exporters Tata Consultancy Services , Infosys and Wipro to "underperform". The company also replaced TCS from its Top-10 list with ICICI Bank.

On the other hand, it has upgraded industrials to "overweight" from "neutral" mainly due to factors including a rise in infrastructure spending, cut in interest rates and an expected appreciation of rupee.

Among other changes, the brokerage has added Bharat Heavy Electricals, Hindustan Petroleum Corp, Asian Paints and Wockhardt to its model portfolio and removed Housing Development Finance Corp and MindTree.

Meanwhile, another firm Jefferies has become positive on the Indian IT sector calling it a `defensive'. The stocks have underperformed the whole market by 22 per cent and the valuations are at a level that it can be upgraded to buy rating.