Stay invested in IT space, says Nitin Rakesh

Nitin Rakesh, MD & CEO, Motilal Oswal advice investors to stay invested in IT space.

Rakesh told CNBC-TV18, “Tech Mahindra number is all about the expectation versus reality situation and clearly the market was surprised positively. The commentary was very positive. They do expect some big bump up from the integration that they are doing over the next few quarters. All in all, I think there is generally a positive sentiment given the way rupee is depreciating and we genuinely believe that IT, specially midcap IT also probably is a bigger beneficiary of the whole currency play.”

He further added, “There is safety in projections. There is quality of earnings. There is free cash. So all in all I think IT isn’t really a bad place to be in and in this case they have probably benefited from the tailwind that they are getting from their earnings and integration.”

“Maruti Suzuki is reacting to the petroleum price hike, so clearly there has been a round of EPS downgrades post the petrol price hike because they are predominantly a petrol player and obviously they tend to lose out compared to diesel powered cars. So that’s clearly a reaction. Even two wheelers you will see some reaction has happened today. So the two wheeler companies are also reacting negatively. So their adjustment based on news flow from Delhi will continue to happen till we find common ground.”