Overweight on IT, prefer Infy, TCS, HCL Tech: MOFSL's Gautam Duggad
"IT is a sector which we have liked a whole lot in the last two years," said Gautam Duggad, Head of Research for Institutional Equities at Motilal Oswal Financial in an interview with CNBC-TV18.
"IT is a sector which we have liked a whole lot in the last two years," said Gautam Duggad, Head of Research for Institutional Equities at Motilal Oswal Financial in an interview with CNBC-TV18.
"We are running a 300 bps overweight on IT for since last 12-15 months and we are continuing with that," he said.
He has a preference towards Infosys, Tata Consultancy Services (TCS), and HCL Technologies. "I remain very positive on IT even for FY22. I think margins will remain far more resilient than what a lot of people are thinking right now,” he said.
His preference in non-banking financial companies (NBFCs) is HDFC and Cholamandalam Investment and Finance. He also likes Muthoot Finance as well.
He believes things are turning fluid in terms of earnings.
“Things are again turning a little fluid if you look at the environment. Therefore, one has to remain very open on where these earnings can go. If there are lockdown and restrictions getting imposed, I am sure at some point of time consumer sentiment will react to this. Unless we don't see big national lockdown, there should be no impact on earnings,” he stated.
Nifty FY21 EPS stands at Rs 533, he said. “There is a marginal increase - half a percent here or there for FY22 and FY23. So estimates are more stable this time around. If our estimates are delivered, we will end FY21 with an earnings growth of 13 percent which will be the highest in a decade. So this is a strong and healthy performance as far as Nifty is concerned for FY21,” he explained.
In terms of metals, he pointed out, “Metals have seen massive earnings upgrades. This quarter the metals will deliver the highest-ever profit, it will be higher than IT, higher even than oil and gas.”
Duggad’s bias is more towards cyclical as far as automakers are concerned, he shared.
“My auto stocks in the model portfolio are both cyclical, Mahindra and Mahindra (M&M) and Ashok Leyland. We have made both Maruti Suzuki and Eicher Motors zero in our model portfolio and that call so far has worked well,” he said.
“Cement is our most preferred cyclical sector after BFSI. We have a double overweight on cement. We like names like UltraTech Cement, we have a midcap allocation to JK Cement which has been continuing for more than a year,” he stated.
For the full interview, watch the video.
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(Edited by : Priyanka Rathi)
First Published: Apr 9, 2021 11:51 AM IST
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