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Rupee strength could be a headwind for IT stocks, says Dimensions Corporate

Updated : August 27, 2020 03:44 PM IST

The strength in rupee could be a headwind for IT stocks, said Ajay Srivastava, CEO of Dimensions Corporate Finance Services. The Indian currency recently hit its five-month high amid sustained foreign capital inflows into the Indian market and recent weakness in the safe-haven US dollar.

The rupee gained sharply in afternoon trade on Thursday and touched 73.90 against the US dollar after RBI Governor Shaktikanta Das said the central bank has not exhausted its ammunition to deal with the current situation due to the coronavirus pandemic.

The rupee rose 40 paise from its closing level of 74.30 on Wednesday. In the morning trade on Thursday, it had touched 74.36 against the American currency.

In an interview to CNBC-TV18, Srivastava said, "We are at 74 for a long time now. From 78, we have traveled to 74 or 77 thereabouts. This year the exchange covers are not going to give that much benefit. So fingers crossed, we need to see where it goes but not too buoyant about it."

He further said that he would advise booking profits once targets are met.

Speaking about specific sectors, Srivastava said that the real estate sector looks good after underperforming for the past few years.

"There could be investment shifting towards PSU banks, sugar stocks, and real estate," he said.

"We believe PVR will bounce back in the next 2 years and therefore, we remain bullish on the company," added Srivastava.

 

(Inputs from PTI)
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