Underweight on IT sector, risks still remain: Abhay Laijawala

Abhay Laijawala, Head - India Research at Deutsche Equities told CNBC-TV18, "We are going through the sequential process as we had envisaged when we cut our rating on IT services from neutral to underweight. In fact IT is now our biggest underweight in the model portfolio. We think that we are not yet done with the risks. With the banking and financial services sector globally under stress, discretionary IT spending remains a risk area. Therefore until things have settled, until we see the banking and financial services sector globally look better, I doubt if this overhang on the IT services sector will lift.""So, probably the market will be expecting the guidance change from the IT services sector companies could continue to go down, at least that is the expectation," he said. "In fact if you looked at the recent Gartner study as well which had just come out after Brexit but the poll was done pre Brexit, it was talking of IT services sector being flat and this was before Brexit. So, clearly we still need more visibility on what is happening over there before we get more confident."