Lighten investment in Mastek; wait for correction to buy mid-cap IT

ET Now caught up with Ashit Suri, Fundamental Research Analyst, JV Capital Services, to get his views on the outlook of Mastek.

Mastek is 5.5% down. Its q-o-q guidance is softer than what it has done in the current quarter. The q-o-q guidance is even worse than what it has done right now. What would be your immediate view on Mastek after the 5% downtick that we have seen here?

When we are taking a call on Mastek or any other stock in the IT space, one way to look at it is to look at the overall market which is at the higher end of the valuation band right now. Moreover, there are concerns about the economy improving and sustaining these volumes as well as margins. So, with this kind of backdrop of the current result and lower guidance, one would be very careful about his/her moves. People who are holding the stock would probably think of lightening their investment in the stock for the moment and wait for some corrections to get into the stock later or look for corrections to get into the larger IT stocks like Infosys and TCS, which are likely to perform better than their guidance. So, one has to be careful at this point of time when you are looking at midcap IT and one should wait and get into the larger players after corrections.