What to expect from IT sector? Is the storm over for Adani stocks? Mayuresh Joshi answers
Mayuresh Joshi, Head Equity, Marketsmith India, says valuations of IT stocks may be expensive but they continue holding a few stocks like Coforge, Infosys, Persistent in their global portfolios. Also, within the Adani group, Adani Ports is one stock that investors can keep on the watch list.
The IT sector is taking quite a bit of beating today. Infosys is down 3.5%. L&T Tech is down over 3%. HCL Tech, Tech Mahindra have run up quite a bit in the last three to four months, but what is the expectation from hereon on IT?
Mayuresh Joshi: Two things are happening here. One, from a results perspective, a large part of the midcap IT basket has performed really well. So, even on a higher base, the expectation in terms of how revenue growth will be in constant currency terms was very stable. The margins were very stable and the commentaries were surprisingly very robust over the next few months and quarters as well.
Valuations and late-stage basis, obviously, is something which is not in favour of midcap IT or largecap IT to a large extent. But earnings will keep on continuing growing at a decent pace. The headwind probably is what Trump might probably do in terms of visa curbs, so on and so forth. We had seen that in the past as well and these companies probably adjusted themselves pretty well.
In case the headcount cost goes higher, if this transpires, as Trump assumes office, the IT companies will take that in stride and hedge themselves against the possible disruptions that can affect them. Valuations are no doubt
