Don't recommend buying in IT space at current levels: Sandip Sabharwal

In a chat with ET Now, Sandip Sabharwal, Market Expert, shares his views on the IT pack. Excerpt:

ET Now: Do you think HCL Tech, Infosys or TCS, these stocks have long way to go and can they also appreciate in an environment when currency is no longer a tailwind?

Sandip Sabharwal: That is the biggest concern because last year what we saw was that the salary cost in terms of hikes were pretty muted and the currency favoured them hugely.

Now, this year we could see a scenario where currency pressures could come back just because the entire industry is doing so well. So, there will be hiring pressure. On the other hand, the currency will not be favourable to them. So, they would not get that benefit.

So, the margin outlook which most analyst have for the next year could be slightly optimistic although on the top line we could see the growth coming through as most of the CEOs are indicating. However, margin picture might not be as benign and that is the risk in the IT trade.

ET Now: So you are not a buyer in IT?

Sandip Sabharwal: Not at these levels not at all.