The next couple of quarters would be big for midcap information technology firms, said Aditya Narain, head of research, institutional equities, Edelweiss Securities, in an interview with CNBC-TV18.Â He is also upbeat about the prospects of industrials and non-banking finance companies (NBFCs).
âThe next couple of quarters would be big as far as midcap IT goes because there is something like squeeze cycle that happens, the large ones move then the midcaps move and so we have geared our portfolio entirely towards that,â he said.
Sharing the rationale for being upbeat on industrials, Narain said: "The corporate tax cut was quite material and moreover if we could get little bit more tailwind in the economy both globally and bottom up then that is the theme that could play reasonably well.
âSo, if you see an endearing theme in the economy that is coming through then this could be one,â he added.
Narain continued: âThe third theme is, we talk about real estate fix, NBFC fix, so if we do get certain amount of policy stimulus and policy support for that space, which is real estate space, the logjam that we have in financing then that is a thing that could play through very aggressively from a stock perspective."
The finance firm is also positive on the telecom sector. âIt is already a consolidated market and there is huge amount of value in the space. The reality is you cannot do away with telecom, in fact, if anything it is going to grow.â
About the auto industry, which is struggling with continued slowdown, he said that Edelweiss Securities is cautious on the space because it has run a little harder than what the underlying would effectively support. They had cut the underweight on the space and raised it to neutral because the market was too wary, he added.