S Naren positive on IT space

Naren told CNBC-TV18, “What call we have taken is the IT sector has become like almost x-growth in many of the companies and consequently we have actually added to our tech exposure in April and we have gone overweight across the sector in most of our schemes. The reason being end of the day when a sector goes x-growth and it benefits out of the trade deficit being high, we thought that it’s a good sector to actually go overweight on.”

He further added, “One of the key components of demand has been the BFSI space, which certainly is going to go through a cyclical downturn this year, but end of the day Indian exports is led by IT if there is no IT there is not much of Indian exports. So it’s very easy to bet on IT as a defensive industry at this point of time given that most of the stocks in the sector have got de-rated very significantly in the last 3 years or 4 years and now we are in a much more comfortable valuation basis.”

“On the large cap side the market cap still looks not so cheap. On the mid cap side the valuations are interesting both on market cap basis and on PE basis and therefore there we have to do much better work on the bottom-up side because there many of them have problems. So on the whole I would say it is one of the very sectors where we are very positive on with a one year view and we believe it’s time to accumulate the sector very aggressively at this point of time because relative to most of the other defensive sector the sector has become extremely cheap relative to the other defensive sector.”