Geometric Software is a good stock to accumulate: Rajen Shah, Angel Broking

In a chat with ET Now, Rajen Shah, Chief Investment Officer, Angel Broking, shares his views on technology stocks.

ET Now: What is your call on technology space?

Rajen Shah: Infosys has come down to reasonable levels. At about 15 times, Infosys looks reasonable. However, in the IT space, one stock which we have been we have been accumulating is Geometric Software.

The company has done reasonably well for the last year and for the current year, we are expecting about Rs 10.5-11 earnings. The stock is trading at about 62-63 levels. It is at 5.5-6 times the earnings. It is a Godrej Group company.

I strongly believe that Godrej Group may exit this business. They own about 32% stake in this company and over the next 12-24 months, we could see them moving out of this business. If that happens, this stock at 6 PE multiple looks extremely cheap. It is quoting at half the sales. Other IT companies are trading at 3-4 times the sales whereas this company is trading at half the sales.

So, as and when this company is sold out, the valuations could really get re-rated. At 62-63, there is nothing to lose in Geometric Software. It is a quality company from a quality management and that at 6 PE multiple. I do not know why this stock is being not looked at in the market.