'Like TCS more than Infosys'

In a chat with ET Now, Amit Khurana, director research, Daulat Capital, talks about the outlook of Infosys.

What are your expectations from the big boy Infosys?

You can really never call the market on a near-term basis. The perspective is that we are expecting about a 3% quarter-on-quarter dip on Infosys net earnings for Q1 and our sense is that any revision in the guidance is purely driven by cross-currency factors. While we do maintain a positive view on the sector, our sense is that the valuations are looking reasonable from a first quarter earnings perspective. There are pretty strong headwinds, especially on the cross currency side. We have had some concerns over there and volumes are pretty decent from our channel checks but it is all in the price as of now. Tactically, we are a little cautious right now. We actually like TCS more than Infosys at this juncture, even though there have been some concerns on the European exposure that they have but if we look at the historic discount, which TCS has traded at versus Infosys, it is among the highest right now. So, that's what where our preferences would lie and then we like the mid-cap story on IT services.