Is it time to partially book profits in IT?

This morning there is a lot of enthusiasm around IT. Currency clearly seems to be favouring them. Globally, things are looking up. Yesterday, Accenture upped the revenue guidance. How long would IT continue to be strong? Is it time to partially book profits in IT?

The best time for IT was a year ago when there were contra ideas and compelling valuations. The growth trajectory since then probably has not altered significantly. Accenture has consistently outperformed and upped their guidance over the last two-three quarters but the mix is considerably different. Even within digital, it is more of the new digital compared to the old digital.

As borne out by Accenture’s results, North America is picking up and that should partly help Indian IT companies also to move up from that 5%-6% growth that they have seen in North America over the last few quarters.

Meanwhile, rupee remains favourable. Our analysis tells us that valuations are not cheap anymore but they are not expensive either. But can they significantly outperform from here on? Probably yes. The market is turning a little defensive and it is not as juicy as it used to be six months or 12 months ago.

Taher Badshah, CIO (Equities), InvescoMutual Fund, tells ET Now that middle of the midcaps will probably do a little better than the upper and the lowest parts.

Full Interview available at : ecoti.in/LW1Y3b