IT sector valuation supportive, but stance remains cautious: PL Capital

While valuations of information technology stocks are currently supportive, the stance on the sector remains cautious due to the uncertainty about the impact of artificial intelligence, said Amnish Aggarwal, co-head of institutional equities at PL Capital. The broking firm has an ‘underweight’ on IT companies, along with cement, metal, oil and gas sectors.

“Although large (IT) players will be survivors, intermittent period will be volatile with uncertainty on growth and margins,” as per the broking firm’s India strategy report. However, the India-European Union (EU) free trade deal will give much easier access to EU which has seen faster growth with increase in share of service exports from 20% to 25% over the past five years and further increase in coming years, as per the strategy report.