Gautam Duggad, Head of Research – Motilal Oswal is very bullish on the IT sector.

  1. The last 3-4 months have been good for IT companies.
  2. He expects the performance to continue in the current quarter also.
  3. He mentions many positives for the sector: attractive valuations, solid free cash flow generation, strong balance sheets, and falling Rupee against the Dollar.
  4. NIFTY IT index was up 8% in 2018 so far.
  5. “We are expecting that in a structurally adverse environment for IT, CY18 could offer a cyclical reprieve. Given the current valuations, there is still some room for IT companies to keep doing well because they are still trading in the 15-16 band (P/E ratio). TCS is available at around Rs 19-19.5 one year forward. Technology is making a big comeback after seven-eight quarters of sluggish growth. We are expecting a double digit profit growth,” he said.
  6. He is going after mid-level IT companies for good growth.
  7. Kotak securities is also very bullish about the sector.

Read More Here.