Ajay Kejriwal, President at Choice Broking feels that Infosys (the growth leader in the sector) and TCS (a sector leader) will continue to attract investors’ interest, mainly on the back of their ability to withstand any headwinds in the sector.
“Other IT stocks will continue to react on the sectoral sentiments,” he said in an interview to Moneycontrol’s Sunil Shankar Matkar.
After delivering a super normal return in the last 12 months, Choice Broking fees that market returns over next year would be in the range of 8-12 percent, said Kejriwal who has over 20 years of rich experience in financial markets.
IT majors (TCS, Infosys, Wipro and HCL Technologies) announced their September quarter earnings during the week. What is your overall reading considering run up in stock prices and have you changed your earnings estimates for FY22?
These stocks are not under active coverage. But as far as the Q2 FY22 performances of these companies are concerned, it is positive to neutral. Considering the performance in H1 FY22, we feel that there will be earning upgrades. As far as the share performance is concerned, we feel that Infosys (the growth leader in the sector) and TCS (a sector leader) will continue to attract investor’s interest, mainly on the back of their ability to withstand any headwinds in the sector. Other IT stocks will continue to react to the sectoral sentiments.
The market rallied around 50 percent in the last one year. Do you expect the similar kind of return by next October 2022 and what could be driving factors for the same?
After delivering a super normal return in the last 12 months, we feel that market returns over next year would be in the range of 8-12 percent.
What is your advice to investors in the current market scenario?
We will continue to reiterate our advice of investing in fundamentally sound stocks and follow/take investment advisor’s view on market and stock movements.
Do you expect a big IPO line up in the second half of October 2021? Also do you expect the amount of fundraising via IPOs in 2HFY22 to be higher than 1HFY22?
In H1 FY22, 25 companies have raised around Rs 52,000 crore through IPO route. In H2, the pipeline is pretty strong. Prominent companies, which are planning to raise money are Mobikwik, PayTM, Nykaa, Fino Payment Bank, etc. Also the IPO of LIC is scheduled in the last quarter of the current fiscal. Thus, considering the line-up, we are confident that the amount raised in H2 will be far better than H1 and FY22 will be considered as one of the best years for the IPOs.
Do you feel the inflation worries on rising oil price, and higher US bond yields on expectations of beginning of Fed tapering in November 2021 could spoil the party?
I think the market has already factored in the FED tapering news. As far as the inflation and the US bond yields are concerned, we feel that there will be a certain knee-jerk reaction or nervousness, but over a period, this will be considered positive by the investors. However, sustained yields higher than 2-2.5 percent, may be a trigger point for the domestic markets.
Is it the time to go overboard on sectors (including travel, tourism, hotels, aviation and many more) that were affected the most due to COVID-19 pandemic? What is your pecking order?
The economy is gradually witnessing the opening up of the service sector, especially the contact-intensive companies. Currently the share price has run-up in the anticipation of fast earnings revival. Currently we are not advising companies from the above mentioned sector. Before recommending, we will wait to see the earnings revival and its sustainability.
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