Expect IT space to deliver positive price appreciation: Pankaj Pandey, ICICIdirect.com

In a chat with ET Now, Pankaj Pandey, Head Research at ICICIdirect.com, shares his views on the IT space. Excerpts:

ET Now: IT has really come back of late barring a few odd days of profit booking. What stocks are you recommending to your clients in this sector?

Pankaj Pandey: In the IT sector, we would expect the dollar revenue growth to be better this year. It was about 12 per cent odd last year and we would expect it to be 13 per cent odd this year. But rupee growth could come down to about 10 per cent compared to about 25 per cent. However, TCS is still quite strong within the IT pack.

Hence, what we are expecting they will deliver about 18 per cent to 19 per cent kind of a dollar revenue growth this year compared to what we were expecting earlier, that is about 16.5 per cent kind of a growth.

They are clearly leading the pack in terms of growth and it is trading at about 20 times and we would expect numbers to be revised upwards. Currently we have a target price of 2700, but the numbers will get revised upward because of the kind of growth they have been delivering.

Overall we would expect the IT sector to deliver positive price appreciation. But then again, domestic cyclicals will do better.