Expect tailwinds for IT sector in near term: Anshul Saigal

economictimes.indiatimes.com:

«These were the valuations at which this company was trading and you could have hit a dart and picked a stock in this space and it would be trading at 2-3 times, 4 times price to earnings,» says Anshul Saigal, Founder, Saigal Capital.

Is the Street making too much of the earnings from TCS or do you think this was long overdue?
Anshul Saigal: So, as regards the IT space in general and TCS numbers, clearly the numbers are a slight beat over street expectations. Since 2021 December, this sector has consolidated by and large, particularly for the largecaps. Even for this frontline name, if you look at the stock price, you will notice that it is about the same level that it was at till about two-and-a-half years back.

So, clearly, there has been significant consolidation in this space. And the street was looking for a sliver of positivity, which came through in this quarter. As also there is some indication in the US that there will be a benign interest rate environment going forward, which will be good for industry over there and that translates into growth for Indian IT.

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And take all of this together, it looks like this is really what the street was looking for and TCS has given a spark to the fire. I think that at least in the near term, there will be expectations built