Ajay Bagga bullish on IT space, prefers pharma

Ajay Bagga, Market Expert told CNBC-TV18, "I have been continuously saying despite what happened at Nestle the ROEs are very high, they are not capital junkies, they don’t take a huge amount of capital and then give poor margins. Their EBITDA margins are good, operating margins are pretty spectacular and even with a 4,5-6 percent growth due to the commodity price falls they will yield you good margins. So I would stick with quality and continue to recommend that."

"If you can get the good IT players who are reacting well to the models which are emerging- you look at Oracle in the US for example, it is totally focusing on cloud base now, that is a product company but you look at the service companies, whoever is digitization, whoever is doing automation, productivity gains, those companies will benefit and I still stay bullish on IT especially the Indian IT pack, they will give good returns. Same for pharma, very high ROE, very low Capex outlays, so again in a market like this if you have a choice, I would say go for pharma as well, you will be well rewarded," he said.