Should you buy the dip in IT stocks? Sandip Sabharwal answers

economictimes.indiatimes.com:

Sandip Sabharwal, asksandipsabharwal.com, says “IT is always a space which has found a huge amount of interest from retail, HNIs, as well as funds. All three categories of investors are continuously looking to buy stocks in the technology sector because they do not have debt on the balance sheet and pay out good dividends. Also, buybacks keep on happening.

Whenever performance comes, that might sustain. But overall for the sector as a whole, the situation is not very good at this stage. ”What I am surprised about today is the reaction coming in on Tech Mahindra. It was a very bleak set of numbers. There was no silver lining but the stock is holding up. Birlasoft has reported a very strong set of numbers and is higher by 5%. How are you viewing IT because a lot of people are now banking that this is the worst phase and perhaps the best time to buy?It might not be the worst yet and the project ramp down will continue and companies which are facing issues, will continue to do that.

There are a set of mid-tier companies which have been doing things which are different and growing against the market which include companies like KPIT, etc. The traction might continue. IT is always a space which has found a huge amount of interest from retail, HNIs, as well as funds.

All three categories of investors are continuously looking to buy stocks in the technology sector because they do not have debt on the balance sheet and pay out good dividends. Also, buybacks keep on happening. Whenever performance comes, that might sustain.

But overall for the sector as a whole, the situation is not very good at this stage.The last time we saw Cipla in 2020, it was in double digits. So a massive move is coming in. Do you think it is warranted?Yes,