Series 8 – Our Positioning in IT

As per our note last week, we have been evaluating our exposure to the banking sector, given its significant contribution to the Nifty 50 market weight. We note that the banking, IT, and auto sectors together contribute to around 60% of the Nifty 50 market weight, and we will be focusing on the Auto sector next week. However, this week, we would like to discuss the earnings growth of the three largest IT players in the country, namely Infosys, TCS, and HCL, and share our view on the IT sector.

We have observed that these top IT players have reported positive revenue growth over the last seven quarters, which is encouraging. However, we have concerns about the reduction in employee numbers despite consistent deal winds and a robust increase in order book. This sends mixed signals, and as a result, we have taken an underweight position in this sector in our portfolio.

These weekly episodes are now available in our website for your quick read and you may access the same in the below link.

Weekly Enlightenment Archives – ITUS Capital

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