Infosys, TCS, KPIT Cummins, Tech Mah top IT bets: Religare

Rumit Dugar, IT Analyst, Religare spoke to CNBC-TV18 regarding his outlook on the IT sector after some of the major companies like Infosys and Tata Consultancy Services (TCS) posted better-than-expected results.

Also Read: SBI won't recover soon; shun private banks; IT safe: UBS Dugar is bullish on IT sector as rupee depreciation has been beneficial and broader macro environment especially in the developed market is looking better. He is betting on largecaps like Infosys, TCS and Tech Mahindra. Among midcaps he likes KPIT Cummins. “Their guidance is pretty solid and the company is talking about 14-16 percent growth which is above the industry,” he adds. Below is the verbatim transcript of Rumit Dugar's interview on CNBC-TV18 Q: What kind of companies is Religare positive on, are you more positive on the midcap IT companies because valuation catch up is an order? A: The valuations in IT space have been reasonable. Rupee has been a tailwind and more importantly broader macro environment especially in the developed market at least is looking better. So to that extent, we have been positive on them. Our preference has been largecap technology, but with broader macro environment beginning to recover and growth in this quarter, most of the companies including midcaps have surprised positively, you could continue to see an entire sector rally. So, our strategy overall has been that you should be positioned for some of the demand recovery names and growth polarisation, historically, it should narrow down. Q: What are your top 3 picks in the IT space, both from largecaps and midcaps and also your target prices on the stock? A: Our strategy on the broader technology has been that you have to play execution, demand recovery and bottom-up P/E rerating stories. Within the largecap space, our picks have been Tata Consultancy Services (TCS), Infosys for demand recovery and bottom-up P/E rerating as Tech Mahindra. Within midcaps, we like KPIT Cummins and we upgraded that stock. Their guidance is pretty solid, they are talking about 14-16 percent growth which is above the industry. So that has been one of our key midcap ideas.