Expect portfolio companies to generate at least 25% earning growth: Aveek Mitra

economictimes.indiatimes.com:

Aveek Mitra of Aveksat Financial Advisory, says they always try to predict what is going to happen for the next quarter, two quarters, or three quarters as per what the management guidance gives or their understanding. Aveksat does not want to invest anywhere they do not expect at least 25% growth in earnings, as otherwise, it is very difficult to generate alpha at a portfolio level.

He expects the portfolio companies to generate at least 25% earning growth this year going forward. Now expectations can always be wrong.

What is happening in IT? There’s a 7% up move in TCS after the results, I mean at least our reading was that the management was pretty non-committal on giving any outlook or colour, but the Street seems to have loved the numbers. Which part of the IT space will make maximum money in the next two years? Is it the complex niche guys, high-growth guys, the mid-tier ones? Where is the alpha in IT?
Aveek Mitra: I listened to the TCS conference call on Thursday night and I realised that the situation is not as bad as we always predict.

This always happens. The situation is not as bad as people think and it is not as good as people expect.

So, it was in between and interestingly, they have also increased a little bit of manpower this time. Altogether, the worst is over, but this sector, at least the big players will have a kind of problem in showing a big growth going forward for various reasons, starting from the GCCs which have started competing with them on their own ground to AI to new changes, smaller players getting into niche areas and providing very specific solutions.