IT, pharma and FMCGs have reached their highest point in cycle: Ambit Capital

In an interview with ET Now, Saurabh Mukherjea, CEO, Institutional Equities, Ambit Capital, shares his views on sectors for booking profits. Excerpt:

ET Now: Where would you advice your clients to book profits, when it comes to pharma?

Saurabh Mukherjea: Both IT and pharma are sectors which have reached a high watermark. For the last two to three years, owing to both global and Indian growth fears, there has been a fear trade, which has resulted in investors piling into IT, pharma and FMCGs. These sectors have reached their highest point in the cycle.

The price to book of defensives to cyclicals is at an all-time high; I would book profit in the front line names in all three sectors -- IT, pharma, FMCG. I will swing towards cyclicals and bankex. Names such as L&T, Cummins, Voltas and PGCIL are where the shift will come through, whereby you rotate away from defensives, which have done ever so well over the last three years and you shift your money towards cyclicals, leaving aside the top private sector banks.