Strong commentary from top IT cos indicates new tech spend cycle, says MOFSL's Gautam Duggad

Gautam Duggad, Head of Research for Institutional Equities at Motilal Oswal Financial Services, on Monday, said that he remains positive on the IT sector going forward as strong commentary from the firms indicates a new tech spend cycle. Infosys is the "single-largest overweight" in their model portfolio, he said.

Among IT firms, TCS reported a 7.2 percent sequential rise in consolidated net profit at Rs 8,701 crore in the third quarter of fiscal 2021 backed by strong demand-led revenue growth. The stock price hit a fresh 52-week high of Rs 3,224.00 apiece in early morning trade today. TCS said that it was the strongest third-quarter growth in the last nine years.

In terms of metals and cement, Duggad said, “Two-third of my incremental growth in our coverage universe is coming from metals and another 10-15 percent from cement. So 80 percent of the incremental growth in Q3 of FY21 has been driven by these two sectors.”