Rahul Singh, CIO-equities at Tata Mutual Fund, on Friday said that largecap IT companies are performing well and providing more comfort than their midcap counterparts.
“One has to become more market cap-agnostic at this point of time and gravitate towards largecaps. IT is a good example of relative reasonableness about largecaps versus midcaps and we are also seeing that some of the largecaps are also delivering but with margin levers and valuations being still in high teens rather than in the high twenties, the comfort is there more than the midcaps,” told CNBC-TV18.
Speaking on automobile companies, he said, “Beyond the temporary rebound in demand, the challenges are on raw material inflation and there are certain product-specific challenges. Of course, a big challenge is how the industry copes up with the electric vehicles as the penetration goes up.”
On metals, he said the way the markets are positioned right now, there is still a little bit of uncertainty on the sustainability of margins and the prices for FY23-FY24. "If you look at valuations on that, the EV/EBITDA will look cheap, but then obviously, commodities will look cheap at the peak and expensive at the bottom of the cycle. But it's a little bit of confidence coming in the fact that these prices could stay on a little bit longer and it's this peak can become a plateau," Singh added.
For the entire interview, watch the video