Jefferies' Mahesh Nandurkar remains bullish on IT sector

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Mahesh Nandurkar, India Strategist, Jefferies, has said he has an “overweight” rating on the IT stocks despite the sector seeing its worst quarter in two years, with the Nifty IT index falling 6 percent in the March quarter.

The bullishness stems from recent commentary from Infosys and TCS on strong hirings and the revenue visibility, Nandurkar told CNBC TV18 in an interview on April 19.

Sharing its fourth-quarter earnings recently, Infosys said it would hire 50,000 freshers this year, while TCS announced 40,000 fresh hires in FY23.

"The overweight (is) on a combination of strong demand visibility, which is visible in constant currency dollar revenue growth on a year-on-year basis, also strong hiring numbers that we continue to see and if we are looking at a twin deficit kind of a scenario,” Nandurkar said.

Also read: Retail investors keep faith in IT sector’s multi-year bull run as institutions waver

Indian markets were one of the best among emerging economies, he said. "There is a broader agreement that at the fundamental level, from the bottom-up perspective, from the economic outlook perspective, India is looking like one of the best markets in the region and within the EMs, but the key concern is still on valuation, a lot of that positive news is already there in the price", he added.

Nandurkar said from a risk-reward perspective, the real estate sector was the best to own. "There is a lot of money to be made here, according to me. Yes, there could be some near-term pullbacks because of the global worries and oil-related worries,” he said.

Nandurkar expects better days for the auto sector, saying passenger vehicles growth had bottomed out and he expected it to improve.