IT space may outperform, says Suresh Mahadevan, MD & Head of Indian Equities, UBS Securities.
Mahadevan told CNBC-TV18, "IT space is something we have been cautious and then been negative, it is not a call which has worked very well partly because of the rupee and partly in times such as these there is generally people kind of hiring some of the high quality names which are in the IT space which is Infosys , TCS , Wipro etc."
He further added, "I am kind of neutral on IT at this point primarily because of the currency weakness. Though our analysts are negative; she is negative on every name except Infosys where she feels the expectations are reality are probably closer whereas in others she sees further downside to the expectations because reality is going to be worse. General argument in the IT space, if you take out the rupee is that the growth rates are coming down. And with global economy not doing that well, I think we can argue that growth rates are unlikely to recover in the near-term."
"My sense about the IT sector is that it's a sector which should probably do well till the market start performing then it may start under performing. So till the markets are in sort of time correction mode or downward trend or lower, I think IT should out perform. But once the market starts recovering I would find it difficult for IT to really do well because the rupee will start appreciating and also the growth rate will start coming down. So till that point, the next 3-4 months IT should relatively kind of outperform is my view."
