IT stocks should benefit from growth in US market: Sudip Bandyopadhyay

Sudip Bandyopadhyay, President, Destimoney Securities Pvt Ltd. in an interview with ET Now talks about IT stocks.

What are the expectations regarding the performance of IT counters?

Very clearly we have seen an unexpected growth coming in US as well as the European markets. Probably six months back, this kind of development and growth was not expected in these markets and obviously the biggest beneficiaries will be our IT companies because in spite of the kind of diversification they have been trying to achieve geographical diversification, majority of the revenues, let’s take the top three IT companies, Infosys, TCS, Wipro, they still have probably more than 50% in all the cases, revenue coming from US markets.

Any upsurge in US markets will definitely help Indian IT companies. Even the mid-tier and small cap IT companies are also direct or indirect beneficiaries of this upswing in US and Europe. The other thing, which probably will work in favour of the IT companies is the movement of the rupee, a) the movement of the rupee is expected to be favourable and b) these companies have probably over the last few years understood and learnt and have been managing the currency exposure pretty well, so the combination of these two factors should generally benefit the IT sector.

Certain specific stocks in this area also are expected to do better than the others, TCS is one and Wipro will be one other stock, which we are expecting to do better than the industry average.