Are IT stocks next lucrative picks?
IT is the most undervalued sector in current market, there will be a lot of sectoral rotation with money moving out of inflated sectors particularly NBFCs, says an analyst
After a muted performance last year, Nifty IT index rose 20.12% in the past one month. Even as the other indices barring PSU Banks closed flat, the index ended 1.54% higher at 13,249.55 on the NSE today.
Shares of Tata Consultancy Services, HCL Technologies, Oracle Financial Services Software, Tech Mahindra, Tata Elxsi and Infosys were the top gainers among the IT stocks today.
Shares of KPIT Technologies rose over 3% while Mindtree was in the red.
IT is the most undervalued sector in current market, there will be a lot of sectoral rotation with money moving out of inflated sectors particularly NBFCs, said Rajat Sharma, CEO and founder of Sana Securities.
This will accelerate even more in case there is a marketwide correction, Sharma said, adding "We have 23% exposure to large and midcap IT Stocks."
A recent Morgan Stanley report said that Indian IT services stocks are set for a turnaround in 2018 as recovery in spending is imminent.
The IT sector underperformed the Sensex in 2017 as revenue growth was tepid. According to the report, a turnaround in IT spending could quickly turn sentiment on these stocks even as the sector faces risks from automation and a slower pace of market share gains from global vendors.