Understanding IT sector

Hi Mudit,

I am not holding LTI so no views on that as of now. Though it is a high growth story.

I was holding Tata Elxsi, since late 2019, and added little more during April 2020, but my position size was small. After about 900% up move in stock price, I decided to exit mainly due to over valuations. Having said this, it is niche business and one can hold it for long term based on your temperament. P/E of above 100 this year was looking too high for me hence booked profit.

I am holding HCL Tech since past six months, so I am holding it due to reasonable valuations of P/E of close to 18. I was not able to buy it earlier during April 2020, but decided to buy if in this year 2022, with moderate expectations. HCL Tech seems to have focused more on their Products & Platforms business and it is some thing which looks good to me. ERD revenue is growing better which is high margin business. I am not expecting it to be a multi bagger or 20% Price CAGR story, but mainly holding it for good dividend yield and reasonable valuations. Most of my investments are from 3-4 years perspective, including HCL Tech. Now I believe lot of patience will be required as tail winds of 2020-21 are over. Now EPS growth will be mainly in lower range like during 2017-2019, as per my opinion. Rupee depreciation will be one of the positives but to a limited extent.

Disc Holding HCL Tech only. There could be better options like LTI, LTTS and others but I am not holding those. I have worked in IT sector for about 24+ years.