The buzz on Dalal Street is that IT managements have never been this bullish on growth in the past two decades. Marcellus Investments’ Saurabh Mukherjea said recently that, ‘this is probably the best demand environment for Indian IT in 25 years’. With such bullishness comes greater demand for talents and hence rising attrition and it’s already here. Read more on how despite this attrition rate, IT companies may not see margin squeeze, investment themes for next 3-5 years, outlook on few buzzing stocks on Dalal Street in this week’s edition of ‘Long & Short of Markets’.
Rise in attrition won’t affect IT cos margins
With attrition comes margin squeeze, but Dalal Street veteran Chakri Lokapriya has the opposite opinion! He sees earnings upgrades for IT companies going forward. He says, in every boom cycle, IT companies see an increase in attrition as the sector sees increased demands resulting in increased orders and volumes.
First metals, now infra, next manufacturing!
The current bull market’s early leaders were commodities and metal stocks owing to the supply crunch due to pandemic lockdowns and slowly infra stocks picked up pace on the Capex upcycle which mainly came from the government’s side world over. Now all eyes are turning towards the manufacturing sector. One of the reasons for this is diversification of global supply chains, believes Aditya Birla SL AMC as it picks manufacturing as one of the 5 investment themes for the next 3-5 years. READ MORE
Brazil’s troubles catalyse sugar stocks upcycle
Recent boost to sugar stocks has come from the government’s push for ethanol-based fossil fuel which has boosted structural outlook for sugar stocks. But reaching those targets can take at least 3-4 year, opines D-St veteran Sandip Sabharwal. But Brazil’s large-scale loss of sugar along with coffee and other crops is accelerating the sugar stocks’ outlook in India, he adds. READ MORE
The great Indian value trap
A promise that could never be delivered till now is costing huge for the once most-valuable company in India. ITC’s failure to dermerge it’s FMCG and food business from its flagship cigarette business has made the stock a value trap. But the FMCG major has failed to deliver on gaining market share or PAT front in the past five years, says Devang Mehta of Centrum Wealth Management. But in the next 3-4 years, it’s a good value buy, he adds. READ MORE
Sweet technical outlook for this Nifty laggard
A historical pattern suggests that Nifty’s worst performing stock in July may light up very soon. Pharma major Dr Reddy’s Labs is in oversold territory. Going by the data, in the last five years, when the stock had been oversold, the drug-maker rallied over the next twenty day in 55 per cent of the cases. READ MORE