Vikas Khemani positive on IT space

Vikas Khemani of Edelweiss Capital told CNBC-TV18, "We advise on two-three broader themes. One is that the US dollar strengthening or rupee weakening from a medium-term basis; it is here to stay given the kind of current account deficit (CAD); even the QE taper happens, dollar will strengthen. So for India I think that theme will stay. In that sense, IT and export driven sectors will continue to remain positive and in limelight. IT definitely leads the pack because even developed market growth works for them."

He further added, "Second is manufactured-led exports whether it is in chemicals, auto ancillary, textiles. If you see their quarterly numbers and if you speak to them, suddenly they are doing very well. It is unfortunate that they don’t have enough capacity to cater to the global demand. So you will see huge amount of capex coming into them. I think if you take three-four years view, stocks getting rerated, multibaggers coming out of this space."

"I remember in 2003 we had done a report on manufactured exports and all the stocks like Ipca Labs and United Phosphorous, Bharat Forge, we covered in that about 10-15 stocks around the theme. I see similar kind of set up getting done in the manufactured exports space. That is one theme and there are lots of - unfortunately only midcaps you can find there, you don’t find any of the largecap names out there," Khemani said.

He further said, "Amongst the domestics, while consumption looks very expensive and risk reward seems to be slightly unfavourably placed, we would be very keen and comfortable investing into the capital expenditure linked sectors. We think the investment cycle has bottomed out whether it is EPC company, capital goods companies, we think that - Crompton Greaves is less of a domestic play, more of international play, but that is also favourite."