When asked about valuations for midcap IT, he said in the last three months, the midcaps have underperformed the largecaps significantly and both together have underperformed the Sensex.
Rupee, global uncertainties are likely to be headwinds for the information technology (IT) space in the financial year 2020, said Parag Gupta, India Technology, Media & Telecom analyst, Morgan Stanley.
"One of the biggest headwinds could be currency; rupee may not depreciate. Two, global uncertainty could be a headwind that would likely impact client spending. Three, the banking sector which was recovering last year may not grow as much as it did in the last few quarters," said Gupta in an interview with CNBC-TV18.
Talking about the longer-term outlook, he said the IT spends would remain healthy.
However, from a near-term perspective, some of the things to keep in mind would be growth trajectory, valuations and sector positioning within the overall portfolio, added Gupta.
Growth, he said, may remain in-line or surprise on the downside. "For the largecap companies, the revenue growth would be around 9 percent in FY20," he said.
When asked about valuations for midcap IT, he said in the last three months, the midcaps have underperformed the largecaps significantly and both together have underperformed the Sensex.Source: CNBC-TV18