Sameeksha Capital continues to avoid large-cap IT stocks despite recent corrections, as the sector's growth outlook remains weak, according to Founder, CIO and CEO Bhavin Shah. The investment firm has not re-entered Infosys after exiting the stock earlier and remains cautious on large-cap IT despite leadership changes at the company. Shah expects the external demand environment to remain the key factor for the sector rather than management transitions. While avoiding pure-play IT services companies, Sameeksha Capital continues to own IT-linked businesses such as Mastek, Sagility and iValue Solutions. Regarding Infosys's CEO transition, Shah said appointing an internal candidate was the right move given the current environment, with the big concern continuing to remain the outside environment.
Instead of large-cap IT, Sameeksha Capital is increasing exposure to sectors such as aviation, healthcare, wealth management and electronic contract manufacturing. The firm continues to have a large allocation to aviation and remains positive on InterGlobe Aviation despite geopolitical risks affecting the sector. Shah said the firm favours hospitals, domestic-focused pharmaceutical companies, wealth management firms, electronic contract manufacturers such as Dixon Technologies, select private banks, smaller non-banking financial companies (NBFCs) and life insurance companies. The firm sees stronger earnings growth potential in these sectors compared to the IT sector's current challenges.
Among banks, Shah said the fund has rebuilt its position in ICICI Bank, citing consistent execution, while exiting HDFC Bank from its core strategy after what he described as disappointing first-quarter results. In the NBFC space, he highlighted MAS Financial, saying the company has delivered consistent performance despite valuation-related pressure from a large shareholder overhang. The firm also favours select private banks and smaller NBFCs, maintaining diversified exposure across the financial services sector.
Regarding AI-related uncertainty, Shah acknowledged concerns about the impact of artificial intelligence on IT companies' growth, particularly Sagility. However, he added that management has historically outperformed its own guidance and "we feel that the management is being conservative." The concern remains: what is the impact of artificial intelligence on their growth, but the firm maintains confidence in management's conservative approach. Shah explained that slowing industry growth and AI-related uncertainty limit return potential in large-cap IT, leading to the firm's cautious stance.
Shah explained that slowing industry growth and AI-related uncertainty limit return potential in large-cap IT, leading to the firm's cautious stance. The firm remains positive on long-term earnings growth across its preferred sectors, with aviation, healthcare, wealth management, and electronic contract manufacturing offering stronger growth prospects compared to the IT sector's current challenges. The investment strategy reflects a shift toward sectors with more resilient growth outlooks and better risk-adjusted returns in the current market environment.
