Buy IT stocks; don't expect huge returns in near term: Sandip Sabharwal, Prabhudas Lilladher

In a chat with ET Now, Sandip Sabharwal, CEO-PMS, Prabhudas Lilladher, shares his views on IT space.

ET Now: What about the IT pack right now? What is the call there?

Sandip Sabharwal: In the IT space, large caps are having extremely divergent valuations today. On one side, companies like Infosys stay at cheaper valuations and on the other side, TCS is at a higher valuation. Obviously, the delivery in terms of their results and outlook is also different. The other side is that the rupee has come down over the last one month since the end of the last quarter.

However, going forward my outlook on the rupee is not so negative. I believe that current account deficit will actually come down this year and in terms of capital flows, things do not look so bad. So, the rupee should be higher than where it is today. Historically IT companies have managed the rupee appreciation pretty well. However, this time there are constraints. In that scenario it might be slightly difficult to handle. So, taking things in perspective, one has to buy stocks in this sector which look cheap in terms of where they are placed. But one cannot expect a very huge upmove in this sector at least in the near term.