It doesn't look like cos in IT are de-growing -:- Equity Research

After Tata Consultancy Services warned of a slower sequential growth in second quarter of FY17 ending September 2016 and said it's seeing a momentum deceleration in banking and financial services business in the US, experts say near-term headwinds are evident in the IT space. Near-term headwinds verticals like IT are evident in both in earnings and stock prices, Anand Radhakrishnan, Chief Investment Officer, Equity, Franklin Templeton Investments told CNBC-TV18. He added that the situation doesn’t look like companies in the space are de-growing but relative comparisons with other sectors make investors wary. Radhakrishnan added that the fund house sees bigger growth opportunities in the medium-to-longer term. He said the broker will increase exposure to IT sector if stocks correct further. Franklin Templeton currently has about 8-10 percent exposure to the sector. Automotive Radhakrishnan said growing income levels and deepening credit is helping the auto sector. He said the MF is constructive and positive on tractor-exposed stocks. Telecom Several experts expect the launch of Reliance Jio to be a game-changer. Radhakrishnan said while telecom stocks have been underperforming, the telecom market is likely to see consolidation in the next 12-24 months. He said that pricing pressures are bound to happen in telecom with large capacity coming online and that the competitive intensity in the sector has gone up. While there could be a shake-up in market share, both in volume and revenue term, incumbent players have the advantage clients that are used to voice and data and pricing shouldn’t bother them.