Indian IT Sector has outperformed in the last 1 year supported by 1) Improved economic data in key markets like US and Europe 2) Strong deal wins, robust environment for new deal wins, ramp up of existing projects and 3) improved commentary on discretionary spending from all major IT players. We believe still there is a lot of juice left in the sector, however the US immigration bill, rising salary and visa cost and volatile currency remains the key concern for the sector. TCS & HCL tech will continue to do well and sentiments has further improved with the participation of Tech Mahindra and Wipro in the performance club. P/E rerating has already happened for these stocks, which now will be supported by earnings growth. We expect the whole sector to outperform for the next 6-12 month. Tech Mahindra remained the favorite P/E rerating candidate in the last six months, which we expect to continue (as it could surprise the street on revenue growth versus industry to due its aggressive inorganic growth strategy). We remain overweight on the sector
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