There will be another 14-15 quarters of good numbers for the IT companies, said Sandip Agarwal, Research Analyst-Institutional Equities, Edelweiss Securities. According to Agarwal, we are in a very long multi-year upcycle.
“..We are just in the second or third quarter of this phase of upcycle,” Agarwal said in an interview with CNBC-TV18.
“We like HCL Technologies, Infosys, Tata Consultancy Services (TCS) in largecap names and in midcap, we continue to believe that Mindtree and TCS will generate equal shareholder value that Infosys and TCS have created – by 2034 or before. So they are multi-baggers," he said.
Agarwal also likes Coforge, Birlasoft, Persistent, eClerx. "These are the names where money will be made,” he mentioned.
Agarwal noted this is the first upcycle the IT sector is witnessing after the 2003-2008 period where margins are improving. “These margins are not going to go down in spite of some of the costs coming back because the subcontractors are not getting replaced by onshore resource but are getting replaced by offshore,” he said.
On revenue growth, he said, “Their revenue growth should be 16-17 percent and 21-22 percent EPS growth for at least next four-five years in my view.”
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