IT safe place to hide, don’t see big outperformance from sector: Geosphere Capital

Arvind Sanger, managing partner of Geosphere Capital Management, on Wednesday, said that IT is a safe place to hide as it provides stability in a portfolio, but don’t expect big outperformance.

In an interview to CNBC-TV18, he said, “IT has become a safe place to hang out because you don't have to worry about China's slowdown, you don't have to worry about COVID concerns, none of these things seems to matter because growth is somewhat more predictable. So, yes, they are safe places to hang out and in a portfolio, they provide a bit more stability and less volatility, but if you are playing it upcycle over the next 2-3 years, I do not believe that this will be where the big outperformance will come from here.”

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“I am certainly looking to buy some of the stocks that have pulled back in this rotation that has happened recently. So I am not necessarily chasing after the IT names and I am not necessarily buying some of the fallen pharma names because I don't think that's where the next cycle is going to come from, but in other areas, yes, we are seeing opportunities to put money to work,” Sanger said.

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On HDFC Bank, he said, “HDFC Bank is not the only bank; it has suffered, obviously, because of its own problems, but even other market leaders like Kotak Mahindra Bank have lagged. So in a sense, the market has shifted its focus, but I think some of that underperformance can come back. But I do not believe that this cycle, as we go forward, is going to be led by the leaders of the last cycle, whether it's FMCG companies or a narrow set of banks like HDFC Bank and Kotak Mahindra Bank."

For the entire interview, watch the video