Valuations of IT space can be significantly higher: Prateek Agarwal, ASK Investment Manager

In a chat with ET Now, Prateek Agarwal, CIO, ASK Investment Manager, shares his views on the IT space. Excerpts:

ET Now: We have seen good quarter numbers coming in from Cognizant. Do you think that is going to augur well for the entire IT pack?

Prateek Agarwal: We like the IT space; it benefits from the environment, as well. The demand is definitely starting to move up.

While there are concerns on the visa regime and the fine sets that some companies may have to pay, the overall demand environment is good. The currency is in favour and cost pressures are low as well.

If you look at the overall make up of the space, the valuations of the space can be significantly higher.

ET Now: Can IT stocks do well even if rupee stays between 60 and 62?

Prateek Agarwal: Even when rupee went to 68, people, who are pricing deals, would not have assumed a number higher than 58. Thus, even when we are looking at rupee dollar at 61-62, they are booking forward at 63. Given the volatility, none of the IT companies may have priced their bids at anything over 58.

Thus, if rupee stabilises at these levels against whatever these guys are projecting, the numbers that will come would be better.