Infosys' valuations look attractive post correction: Mukul Kochhar, Investec Capital

Despite Brexit, there are companies in the IT basket which are still capable of achieving 10 per cent dollar revenue growth, depending on where the rupee heads, says Mukul Kochhar, Investec Capital. Excerpts from his interview with ETNow.

ET Now: What is your observation of the earnings numbers from largecap companies, in IT, FMCG and banking sectors? Mukul Kochhar: In IT, we have the early set of companies reporting their earnings. What you have to do is put the IT numbers in perspective with respect of Brexit which happened just prior to the quarterly earnings. Remember that IT companies are sales organisations, which give guidance on annual or quarterly sales numbers.

So no surprise. A lot of IT companies took the Brexit opportunity to cut their guidance and set more achievable targets and that has impacted stock performance. But if you actually cut through the noise, this is something we were expecting. We were sort of guiding investors to be cautious going into the quarter.

But if you cut through the Brexit noise, there are companies that are still capable of achieving 10 per cent dollar revenue growth, depending on where the rupee heads. A slightly higher rupee and similar EPS growth and a very high return on capital and high level of corporate governance remain key determinants. In that context, a multiple of 15 for an Infosys does not look bad after the correction.