Prefer Polaris, Mphasis, KCP Sugar: G Chokkalingam

G Chokkalingam, Founder & MD at Equinomics Research & Advisory told CNBC-TV18, "I firmly believe that ultimately the US President would compromise on Indian IT sector. I have a strong conviction which is based on the fact that last five years there has been a political realignment involving India, US, and Japan. Therefore, the political economic development would dictate ultimately the compromise on the stance of new President. However, the problems are there for large IT stocks. One, the Eurozone is not growing in a big way and US is also liking the consistency in growth; sometimes suddenly the GDP growth falls to less than 2 percent." "Second problem for large IT companies is the base effect. Today on USD 108 billion it is very difficult to grow the IT export base in double digit, most unfortunate development is that in December quarter for the first time, the year-on-year growth in revenue, even in rupee term, has become single digit for most of these large IT companies," he said."So, I am not bullish on large IT companies, but I believe this would lead to further consolidation in midcap IT space.""Therefore, we continue to recommend Polaris and Mphasis. I firmly believe that there is a lot of opportunity for making money in these mid-sized IT companies which are cash rich and also there is a lot of valuation comfort." "KCP Sugar is a very diversified company but primarily engaged in cement and sugar. Cement in Andhra and sugar in Vietnam. In the last two to three years, they have expanded the capacity of both cement and sugar in a big way and sugar business made Rs 78 crore profit in FY16, this year I am expecting about Rs 100 crore profit from sugar division alone. Therefore, it looks very attractive." "In fact it has got a huge land bank in Chennai as a part of engineering division which is making losses for quite some time now. So, there is a possibility of unlocking that land bank either in terms of sales or diversifying into logistic business. Therefore, I strongly recommend KCP."