Moneycontrol
Feb 17, 2017 08:30 PM IST | Source: Moneycontrol.com

Trump, H1B visa issues notwithstanding, CLSA upgrades IT outlook

Concerns over US government policy remains a key risk for the IT sector, but the risks are priced into valuations to a large extent, says broking firm CLSA.

Trump, H1B visa issues notwithstanding, CLSA upgrades IT outlook
Moneycontrol Bureau

Concerns over US government policy remains a key risk for the IT sector, but the risks are priced into valuations to a large extent, says broking firm CLSA.

The broking firm has upgraded its rating on the sector to 'overweight’.

“On the other hand, an improving growth outlook for the US economy, particularly the US financials and retail, is especially positive for the sector,” said CLSA in a note to clients.

CLSA feels the risk-reward ratio has turned favourable as the sector as a whole has been underperforming the market over the past year.

It has rated HCL Tech as its top pick in the sector and added the stock to its high conviction list, while removing ITC and Maruti from that list.

In its model portfolio, CLSA has removed Tata Motors and reduced the weight for HUL, ITC and Maruti.
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