PSU banks & financiers to benefit from govt capex; bullish on 6 IT stocks: Chakri Lokapriya

economictimes.indiatimes.com:

Chakri Lokapriya, Managing Partner, RSB LLP, says the technology sector, especially large-cap and mid-cap companies, is poised to benefit from the US economic recovery starting in January, driven by the new Trump administration's tax cuts that are expected to boost discretionary spending. Indian IT firms like KPIT, Mindtree, and Cyient may gain from increased engineering research and development spending, which has been stagnant. The cloud computing sector is also set to grow by 35-40%, benefiting major players like Infosys, TCS, and HCL Technology. Lokapriya says he would be ready to invest in Infosys, TCS, HCL Technology, Cyient, KPIT, and Mindtree.
What is your take on the entire banking and financial space, especially after that brokerage note from UBS?.. It was quite a bearish note. While the private banks seem to be holding up rather steady in Friday’s trade, it is the PSU banks and the broader financials that seem to be taking it on the chin, the likes of Shriram Finance, IOB, Canara Bank, all these banks are not doing well right now. How would you like to play this banking space and do you believe that private banks can outperform the PSU banks going ahead?
Chakri Lokapriya: The note kind of talks about everything that was already largely known in terms of the loan growth slowing down.

Provision coverage has been strong. The credit ratios have kind of held up. So, against this backdrop, clearly the RBI needs to cut rates sooner rather than later.

Now when that happens – it is supposed to happen in Feb, but if it does happen sooner – then the cost of funding becomes lower, and all the opposites will happen. Loan growth accelerates and therefore the margins improve for the banks. Having said all that, still all