Weak rupee to aid IT sector; look for corrections to buy into IT names: Ajay Bagga

In a chat with ET Now, market expert Ajay Bagga shares his view on the impact of subdued results on IT stocks.

ET Now: The big story is that while the market is pulling back from the lows, the equity benchmarks keep jostling around the 200-day moving average. I would wish to know what in the Infosys' numbers did the market not like?

Ajay Bagga: I would not like to comment specifically on any stock, but clearly if you see the whole of software pack, we had factored in lower growth for this quarter. The unfortunate part is that, the results — with exceptions of a couple of midcap IT firms — have come even lower than the guidances by IT managements.

Indeed, it is a negative surprise for the market.

In addition, IT firms had a model which was based on body shopping, services. They were evolving a new model and a lot of money was riding on new strategies. All those things are coming out in the April guidances. The guidances are quite weak. Hence, IT stocks across the board are out of favour. I would say that it is a good time to buy IT stocks of well-run companies with good managements, even if they give you 10-12% growth, should have a place to balance portfolio.