Mukul Kochhar, Head of Equities at Investec Capital Services (India), believes IT stocks have corrected from about 20x valuations to more reasonable levels, creating a buying opportunity. According to reports from CNBC TV18, Kochhar notes that large-cap IT companies are likely to grow 4-6% going forward. The analyst suggests that AI fears are currently overplayed in the market, leading to the valuation correction.
Kochhar is turning selectively constructive on IT stocks and advising accumulation near pre-COVID valuation bands of 13-14x. As reported by CNBC TV18, this valuation level represents a significant discount to the current market pricing, suggesting the sector has corrected to attractive entry points for investors. The recommendation comes as the analyst believes AI-related concerns have been exaggerated in the market.
On broader market valuations, Kochhar sees Nifty fairly valued at about 20x with 11-12% earnings growth. According to CNBC TV18, the analyst suggests that India is not a 'brave trade' but a constructive one, indicating a balanced view on market positioning. This assessment suggests that while valuations may appear stretched in some sectors, the overall market fundamentals remain supportive of continued growth.
