IT stocks may not outperform hereon, telecom story intact: Sundaram MF

The Indian IT sector has re-rated on the back of higher margins, but may not outperform hereon, S Krishna Kumar, CIO-Equity at Sundaram Mutual Fund told CNBC-TV18.

“Given good demand conditions and improved profitability the sector has re-rated to historic high margins. So we have discounted FY23 earnings at this point. We believe that the sector will continue to do well but it may not be the outperformer incrementally from here,” he added.

On telecom, Krishna Kumar said: “Long-term, the structural story is there and it’s just a matter of time before there is a reasonable pricing action which will help the players to improve profitability and growth.”