Engineering stocks look very expensive; IT stocks attractive: IV Subramaniam

In a chat with ET Now, IV Subramaniam, MD & CIO, Quantum Advisors, Director, Quantum shares his views on engineering and IT stocks.

ET Now: How come markets are absolutely ignoring valuations stocks like BHEL, Thermax and Crompton?

IV Subramaniam: Most engineering stocks in anticipation of reforms on infrastructure or better order book have gone up significantly. They do not really deserve that.

Even if the order pick up happens, it is a good time for it to translate into good earnings numbers. It is still not clear what kind of infrastructure will benefit, how the order flows will take place. Therefore, most of the engineering stocks look very expensive.

On the other hand, many of the IT stocks have not really run up and their balance sheet is good. They generate huge amount of cash and that looks attractive to me at this point.