Bet on HCL Technologies, advises PN Vijay

PN Vijay, Portfolio Manager of askpnvijay.com said he would bet on HCL Technologies. He likes business model of the company.

Vijay told CNBC-TV18, “What happened in IT was there was a general pre-result euphoria. Right through March it was a big outperformer of the market by a long yard. Then Infosys just caved in and the sector caved in with that. Then some sort of sympathetic selling happened across the board in IT stocks whether it was TCS or HCL Tech.”
He further said, “HCL Tech went all the way up to Rs 820-825 and then crashed down to Rs 685. The same thing happened to TCS but in a small measure. However these companies have come out with very strong results and there is nothing to indicate any dent in their performance.”
“Among all these I really like HCL Tech as a business model because they are not so much concentrated in the BFSI, telecom verticals and in the continent of North America as the rest of the India IT are. They are into different verticals like manufacturing, aviation, human resource (HR) and also their geographical concentration is far better. However, they still have some catch up to do in terms of valuations compared to the other big ones.”
“So, if one were to push extra dollars into IT and assuming that the rupee will be slowly depreciate and IT will be steady in its earnings without all the problems in India's infrastructure etc, I would bet on HCL Tech, and then buy TCS. I would right now be cautious on the midcaps because the jury is still out on sustainability of their margins for the next few quarters,” Vijay added.