Indian pharmaceutical and information technology (IT) sectors are attracting investor attention, with experts recommending certain stocks as top picks.
Nischal Maheshwari, CEO-Institutional Equities at Centrum Broking, highlighted the attractiveness of large-cap pharmaceutical companies, specifically Sun Pharma, Dr Reddy’s, and Aurobindo Pharma. While acknowledging that these stocks may not be cheap, Maheshwari emphasized their steady outlook and strong strategies.
Moving on to the IT sector, Maheshwari recommended Tech Mahindra, HCL Tech, and Infosys as top picks. He also mentioned LTI as a favorable option but acknowledged that its valuation could be a challenge compared to the other three.
Discussing the evolving tech industry, Maheshwari recognized the success of certain companies that have created new sectors and established themselves as leaders in their respective markets. He cited Zomato and Policy Bazaar as clear winners, noting their dominance in the food delivery and insurance comparison spaces, respectively. Maheshwari expressed caution regarding Paytm, as he believes it will face competition from similar players in the market. He also mentioned that Nykaa may encounter difficulties due to increasing competition.
Regarding IT stocks, Maheshwari highlighted the current favorable valuations across the sector. He identified AI as a driver of growth and emphasized that it is a good time to start accumulating IT stocks. While large-caps remain the preferred choice due to their valuations, LTI was mentioned as a potential option, considering its position as the fifth-largest IT company. However, its current valuation may pose a challenge compared to the other three mentioned earlier.
Maheshwari also commented on the inclusion of LTI in the Nifty index, stating that this strengthens the dominance of the banking and IT sectors, which now account for around 60% of the index. He noted that this could present challenges for the Nifty itself.
Overall, the pharmaceutical and IT sectors in India continue to attract investor interest, with specific stocks being recommended as top picks based on their performance, strategies, and valuations.
