Next couple of months are going to be difficult for the markets as there are more headwinds such as delayed monsoon and poor auto sales numbers, said Gautam Duggad, head of research at Motilal Oswal Financial Services.
IT comes out as a strong defence right now given that consumer is a very expensive sector and in pharma, there is no earnings growth plus there are many headwinds in pharma, according to Duggad.
"Therefore, IT remains the sole defense pack right now with a reasonable valuation and within that our preference is more towards tier-I names like Infosys, Tech Mahindra,” he added. Duggad said Mindtree will continue to be volatile until Larsen & Toubro (L&T) open offer gets completed.
“IT will give 8-10 percent growth plus decent capital returns, which is going on be it through dividend or share buyback. So IT sits well in our portfolio as a defensive pack and we are positive on IT,” he further added.
Talking about top stocks on the list, he said, “Our preference is more driven towards financials, a bit of consumption and some bit of discretionary lifestyle related stocks.”
> Financials: Federal Bank, AU Small Finance Bank and RBL Bank
> Consumption: Aditya Birla Fashion and Retail (ABFRL), Trent, Indian Hotels Company.
> Agriculture: Godrej Agrovet
Real Estate: Oberoi Realty Brigade Enterprises
> IT: Zensar Technologies