In IT avoid front liners for the time being: Deven Choksey

In a chat with ET NOW, Deven Choksey, MD, KR Choksey Securities shares his view on the IT sector

ET Now: Coming on IT pack, that one is active today for all the right reasons probably and HCL Tech has got a tailwind of its own too but these stocks are not exactly cheap, what are you advising clients to do and if you are advising to get into IT stocks which one are these?

Deven Choksey: We are not buying across the board anyway in any sector including in IT. Within IT space, the front lines are expensive and it is safer to stay away from the front liners for the time being, not that we are against the business model but we are not basically comfortable with the valuation at which they are quoting currently, given that the market offers better opportunity elsewhere but within IT space if one wants to consider and leave aside front line for a while, couple of midcap companies particularly likes of KPIT Cummins appears to be a better choice.

Fundamentals of the company remains quite strong and at the same time the business situation in which they are operating the verticals that they are operating particularly in the auto space, where they have got a significant amount of IPRs, I feel that these kind of companies can be bought into the portfolio, they are not expensively traded either so quoting somewhere around 10 PEs is not expensive so that can be added into the portfolio and for investment one could have them into the portfolio for a longer period of time.