IT stocks a must for a high-quality portfolio, says Marcellus’ Mukherjea

Information technology stocks have had a rough patch but Marcellus Investment Managers founder and Chief Investment Officer Saurabh Mukherjea thinks that the IT sector is a must-have for a "high-quality India portfolio".

“If you don’t have an IT company (in your portfolio), it’s like having a portfolio in the industrial revolution that doesn’t have steam engine technology,” Mukherjea told CNBC-TV18.

“TCS remains one of our largest holdings there... We don't really have any compunctions,” he said in the interview.

“Whoever is building a sensible high-quality Indian portfolio, you have to have Indian IT (stocks) in it. It's one of those rare sectors where we have world-class companies, which are in the top two or top three in the world.”

On September 13, the market tanked in the opening hour as investors were spooked by a higher US inflation print that had beat the Wall Street anticipation and stoked concerns of tighter monetary policy by the US Federal Reserve.

The Sensex was down nearly 1,154 points, while the Nifty was 300 points in the red at the opening. The indices managed to narrow the losses and were trading off the day’s low at the time of writing this copy.

The August CPI in the US soared to 8.3 percent on-year and 0.6 percent on-month against estimates of 8 percent and 0.3 percent, respectively. The surging inflation has raised the prospect of a more aggressive move by the US central bank.

Mukherjea remains positive about India's growth. “Our view remains as it has for several years like this country's economy is in reasonably good shape. We are formalising the country. As we formalise the country, the black economy is getting crunched and well-run companies benefiting from that," he said.

Talking about the rally in defence stocks, Mukherjea said availability of working capital, prolonged procurement cycle, and delayed payments remain a challenge for the sector.