IT stocks to offer reasonable returns: Gaurav Mehta, Ambit Capital

In a chat with ET Now, Gaurav Mehta VP for institutional equities at Ambit Capital shares his views on IT space.



ET Now: Does IT sector find favour with you right now? Are you having a stock-specific approach?

Gaurav Mehta: Overall, we find that valuations are relatively reasonable for the IT pack, compared with lots of other pockets in the market. Even if we compare the valuations of IT sector will traditional defensive pockets such as consumer staples or pharmaceuticals, the valuations are pretty reasonable.

From that point of view, you would expect reasonable returns from IT pack from here on. Obviously, the things to watch out for would be how the US itself behaves — both in terms of how fast the economy grows and how fast does the US Fed move in terms of rate hikes. This is because all of that is going to have a bearing on an export-oriented sector such as IT. Overall, this is one sector where you are seeing reasonable valuations versus the forward looking prospects. Hence, we are having 'equalweight' on IT sector.