Mahesh Nandurkar says pvt sector capex on the rise; 3 sectors to be cautious about in short and medium term
Mahesh Nandurkar, Jefferies, says he would be wary about IT services companies, select PSU names that have run up quite hard as well as select midcaps and small-caps. He would prefer to sit on the sidelines on some of those from the short and medium-term perspective.
Nandurkar also says that barring one sector, the other sectors of the economy are seeing private sector investments already coming through.
Sectorally, where are you most cautious right now?
Mahesh Nandurkar: One of the sectors that we have been cautious about or underweight on is IT services. The sector has done very well by the way over the last three months. The numbers reported by some of the companies were, I would say, just mildly better than what the market expectations were. But the stocks have reacted in a very strong manner. The small positive surprise that was visible in the June quarter numbers is very well baked into the stock prices. Therefore, that is one sector where we will continue to stay on the sidelines, we will be cautious there.
I would also stay just at the margin in some of the select PSU names which have also run quite hard, I would say probably could be a bit on the sidelines on some of those from the short-term perspective. Also from a short and medium-term perspective, some of the select midcaps and small-caps as well. Those are broadly the three segments where we will be cautious at this point.
Capital goods is in a rah-rah bull market but prima facie, L&T missed the estimates for three out of four quarters. If I look at
