Should you still be a buyer in IT stocks? Abhiram Eleswarapu answers

economictimes.indiatimes.com:

«But I think the story is just getting started in that sense because there are a couple of angles here. One is, even if companies have not been reporting good revenue numbers last quarter as well as this quarter, what is quite visible is that the deal win proportions and percentages have actually gone up, and they still look quite healthy,» says Abhiram Eleswarapu, BNP Paribas.You were still quite positive on IT despite the kind of numbers that we had seen in Q4. Incrementally, what is your view now? Are you still a buyer?Yes, we are still buyers.

And when I say that, I am obviously talking from a long-term perspective, taking into at least a 12-month view here. Of course, we have had stocks taking a bit of a breather. In fact, more than just a breather, they have actually fallen quite a bit since the last results and then started to recover.

But I think the story is just getting started in that sense because there are a couple of angles here. One is, even if companies have not been reporting good revenue numbers last quarter as well as this quarter, what is quite visible is that the deal win proportions and percentages have actually gone up, and they still look quite healthy. So companies are sitting on good order books.

And number two, we are starting to think that the US may not get into a recession as was the view earlier this year and in fact may have a soft landing sort to speak. And as a result, chances are that estimates may turn out to be too bearish towards the end of the year. It is likely that we will start to see some improvement from the second quarter.