Zero in on IT, pharma stocks: Hemindra Hazari

In a chat with ET Now, market expert Hemindra Hazari, shares his view on IT stocks.

ET Now: Share with is your views on IT sector. IT stocks are not exactly at their low points; they have performed reasonably well. Despite warnings by managements, these stocks have withstood the pressure quite well unlike the last time. In the December quarter, while IT companies had come up with warnings, the numbers were not that bad, albiet slightly weak. Do you think the markets would react negatively to weak numbers by largecap IT firms?

Hemindra Hazari: It is possible, but I believe that this would be a good entry point into some of the IT stocks. I feel that IT sector is a universe of bankable stocks, given the fact that the macroeconomic situation is extremely narrow. Hence, even as we may see negative news, investors may start looking into these names.

ET Now: What are your expectations with the fourth quarter earnings?

Hemindra Hazari: The fourth quarter results are going to be weak.

ET Now: Will it be inline with what IT companies are forecasting?

Hemindra Hazari: Exactly. When the numbers come out, any weakness in the stock prices could offer opportunities to enter into the sector.

Where else can you invest in? I am not at all confident over the domestic cyclicals at all. From a relative point of view, IT was one of the sectors, where I would have normally been positive on. I had been positive on the sector too, but now we are getting this kind of negative news flow. The only other sector, as I said, is pharma. Select FMCG stocks can also be considered. But, I do not believe that one can even touch domestic cyclicals. IT is a sector, which could look promising, despite all these negative news coming in. We have to see in fourth quarter results and the management commentaries.