I’d prefer largecap IT stocks on dips; EV agnostic auto parts: S Krishnakumar

economictimes.indiatimes.com:

S Krishnakumar, Director, Lion Hill Capital, says a lot of change is coming in technology and the larger companies would be in a far better position to take advantage of these changes and invest for growth in that area. “So I would like to be more invested in largecap IT but at slightly better valuations. Given that the growth is kind of a little slow, we could probably wait for some corrections to get in there.”

What about the IT space? IT has erased all the losses of this year and now deal visibility seems to be picking up. Would you buy any midcap IT, smallcap IT name or stick to largecaps?
I think the valuations in small and midcaps in the IT space have been generally higher than the premium to the largecap companies. So one would probably look to buy largecap companies at better valuations relative to their own growth. Also there is the fact that they can handle all competitive intensity and also technology just like chatGPT, AI etc. I think a lot of changes are happening in the way delivery of IT is done and we are seeing a lot of investments going into artificial intelligence and ML.

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For example, one person from the Bay Area is telling me that a $7 billion check has gone into AI in the Bay Area in the last six months. That tells you a lot of change is coming in technology and the larger companies would be in a far better position to take advantage of these changes and invest for growth in that area.

So I would like to be more invested in largecap IT but at slightly