Bullish on midcap IT space: Parag Thakkar, HDFC Securities

In an interview with ET Now, Parag Thakkar, Head Institutional Sales, HDFC Securities, gives his views on some stocks. Excerpts:



ET Now: What are you making of the Ambuja-Cement story?

Parag Thakkar: It is a very-very complicated deal. The cement scenario for this quarter looks bad. That is why there have been so many downgrades recently. There will be pressure on prices irrespective of this deal. But since the monsoon is good, there will be a good pick up in the festive season.

ET Now: You have a bullish view as far as several midcap ideas are concerned. Share with us those ideas and the rationale.

Parag Thakkar: The US is recovering. In many midcap IT stocks, the immigration bill is not such a big issue. There are some companies which are very-very attractive. For example, Infotech Enterprise. The stock has a market cap of Rs 2000 crore. The company has got Rs 600 crore in cash and free cash flow yield is around 10%.

Hexaware was available for Rs 85 some days ago. The stock also gave a very good dividend yield. There has just been one uptick in margin number and stock has risen by around 40% to 45%. MindTree looks to be headed towards Rs 1100 or so and it continues to report excellent numbers. I would be bullish on the space. Rupee might appreciate after the RBI move which might force investors to book some profits, but the longer-term trend is positive.

ET Now: Leave us with some specific ideas where HDFC Securities is bullish on?

Parag Thakkar: Amongst the large cap names we are bullish on Power Grid and Bharti Airtel. FMCG is very expensive, but the current problems in the economy are forcing investors to move towards safety. So in the FMCG space we like ITC and Pidilite. In midcap names we like MindTree, Infotech Enterprise, Torrent Pharma and Navneet Publications.