Market guru Mitessh Thakkar is “extremely positive” on IT stocks and his favourite bet within the pack is Tata Consultancy Services (TCS).
“That is one stock I want to add, I have in portfolio and would add on any 3-4 percent kind of a decline,” he told CNBCTV18.
Despite the Tata Group IT major being in an overbought zone, TCS may cross the Rs 4,000 apiece mark as suggested by charts, according to Thakkar of mitesshthakkar.com.
A steady performer in the recent times, the TCS stock hit a 52-week high on Wednesday before trimming the day's gain to end at Rs 3,558.50 apiece on BSE.
At the current level, the TCS stock has risen 24 percent so far this year, and 12 percent this month alone.
The stock's year-to-date return sharply exceeds the headline Sensex index's 16 percent return. IT stocks have had a stellar run so far this year led by the IT pack, contributing the benchmark's rally to a series of highs recently.
"Getting past the levels of Rs 3,400-3,430 was a major boost on the medium- to long-term charts although it has been making higher highs for quite a few months now. This was a rising trendline resistance breakout," said Thakkar.
Last month, TCS — the country's largest software services exporter — had reported a 28.5 percent year-on-year jump in net profit to Rs 9,008 crore for the quarter ended June 30, missing Street estimates. Its revenue had growth 18.5 percent to Rs 45,411 crore in the April-June period.
IT stocks have the second highest weightage in the benchmark Nifty50 index after financial services shares.