Investors may use IT sector for trading bets: Tirthankar Patnaik, Religare Capital Markets

In a chat with ET Now, Tirthankar Patnaik of Religare Capital Markets, shares his views on the current outlook of the IT sector. Excerpts:

ET Now: Do you think IT is now becoming much like a crowded trade?

Tirthankar Patnaik: An investor may not put fresh money into the IT space, given the massive outperformance—over 40 per cent return in the Nifty universe, BSE 100 universe on a YTD basis.

However, from a portfolio tilt perspective, one would remain cautious due to the macro-overhang. For rate cyclicals, one would be under-weight from a benchmark perspective, but on the margin, one would be adding positions.

Thus, for a long term view, it is defensive, and for a short term view, things are turning better. An investor may use them as trading bets.

IT is not an over-crowded trade right now—many insurance companies are at their limits in terms of IT allocation, which is about 15 per cent of their portfolios. Going forward, you may not see buying from this group of the markets; thus, we would know final numbers when the shareholding figures come out by the end of this month.