IT midcaps look undervalued compared to global peers: Anand Tandon

In a chat with ET Now, market expert Anand tendon talks about export-oriented themes.

ET Now: We have been discussing how the currency weakness is getting all the ADRs within the IT basket excited. Which IT stocks stand out for you?
Anand Tandon: Midcap IT stocks have been doing exceeding well of late. You can begin to see a move again in some of pharma stocks and perhaps even the textiles shares. The rise is pretty much there across the board. Export-oriented businesses will obviously begin to look a little more attractive. Overall, the market too seems to be pushing up a bit. So at this stage that is probably one of the safer sectors to be in.
ET Now: When you say midcap IT space, where are you picking your spots because I do not want to generalise the midcap IT space. It starts with the MindTree which is a BFSI company and ends with Intellect, which is a simple banking product company?

Anand Tandon: By and large midcap IT companies, which is in the product space or the ones that are attracting the most attention, are not necessarily in the safest area. The challenge remains that many of the product companies will find it somewhat more challenging to develop new businesses, especially in an environment where license fees are becoming rarer. They are beginning to get on to per user kind of base. That said, the market seems to be favouring price-to-sales and on that paramenter many of the IT companies do look undervalued compared to their global peers.