Sign In

Delhi News Daily

  • Home
  • Fashion
  • Business
  • World News
  • Technology
  • Sports
  • Politics
  • Lifestyle
  • Entertainment
Reading: IT sector struggles to justify premium valuations amid growth fatigue: Sandip Agarwal – Delhi News Daily
Share

Delhi News Daily

Font ResizerAa
Search
Have an existing account? Sign In
Follow US
© 2022 Foxiz News Network. Ruby Design Company. All Rights Reserved.
Delhi News Daily > Blog > Business > IT sector struggles to justify premium valuations amid growth fatigue: Sandip Agarwal – Delhi News Daily
Business

IT sector struggles to justify premium valuations amid growth fatigue: Sandip Agarwal – Delhi News Daily

delhinewsdaily
Last updated: July 11, 2025 7:54 am
delhinewsdaily
Share
SHARE


“I would say that on anticipated lines. As we have maintained our view this largecaps in IT are 5-6% growth story for long term, I do not see numbers going beyond that, in some year growth is zero, then it can be 8-9%, 10% but broadly this has become a 6-7% revenue growth story sector for largecaps. Midcap could be slightly better,” says Sandip Agarwal, Fund Manager, Sowilo Investment Managers.

Noise but no large fireworks also.
Sandip Agarwal: So, these results as anticipated were a no event to slightly negative because the miss in the revenue is quite sharp and the deal wins are okay. Unfortunately, despite BSNL ramp down and no wage hike, the margins increase is also very-very nominal. So, there is nothing to cheer about in the whole number, that 5,000 addition also on a base of six lakh is a very-very nominal addition.

So, I would say that on anticipated lines. As we have maintained our view this largecaps in IT are 5-6% growth story for long term, I do not see numbers going beyond that, in some year growth is zero, then it can be 8-9%, 10% but broadly this has become a 6-7% revenue growth story sector for largecaps. Midcap could be slightly better.

So, 6-7% revenue growth, PE multiples with the exception of HCL Tech, all almost north of 20. So, can I say that it is a no-brainer avoid?
Sandip Agarwal: Absolutely. In a way that looks a logical argument. But then, when we speak to some of the investors in the market, they say that we have FMCG at 45-50 multiple with same output, that is they are also growing at 4-5% growth. So, some people are shifting their FMCG investments to it as a defensive and that could be only reason why some stocks could hold on a little bit. But otherwise, this sector I do not see the largecap growing at more than 6-7% for next five-seven years at least. It is very-very tough to grow beyond that.

Now you are a fund manager. So, as a fund manager, do you own largecap it? It is your favourite sector and as a sell-side analyst you had a view on the sector, now but as a buy-side fund manager, you have to put your money to work where your belief is. So, do you own any largecap it in your portfolio? If yes, why? If no, why not?
Sandip Agarwal: We do not own anything. We were owning two years back when there was no wage hike, there was no bonus, and there was lot of pain in the sector, we bought at that time. We made quick 40-50% for our clients in one year time and then we decided that at the current multiples it makes no sense for us to keep them.

ET logo

Live Events


So, we sold everything. We have very small position in one or two small and midcap but very-very minuscule position that too. We have a very clear view that this sector would not grow and the multiples of five times PEG ratio and four times PEG ratio, honestly we are a deep value fund we cannot afford to give that kind of multiples.



Source link

Share This Article
Twitter Email Copy Link Print
What do you think?
Love0
Sad0
Happy0
Sleepy0
Angry0
Dead0
Wink0
Previous Article News18 ‘Not Going Anywhere’: Nitish Kumar Clears Air On Political Future Ahead Of Bihar Polls – Delhi News Daily
Next Article Ollie Pope provides injury update on Ben Stokes and reacts to Shubman Gill’s taunts of being boring – Delhi News Daily
Leave a comment

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Recent Posts

  • ‘Endangering health’: Bernie Sanders urges Trump’s health secretary RFK Jr to resign; cites ‘dangerous policies’ – The Times of India – Delhi News Daily
  • Istanbul’s ferries link two worlds: Turkey ferries connect Europe to Asia; remain popular despite undersea metro line – The Times of India – Delhi News Daily
  • UAE and India strengthen trade ties with $37.6 Billion in Non-Oil Trade | World News – The Times of India – Delhi News Daily
  • Protests in Australia: Thousands march in Sydney protesting immigrants; refugee group holds counter rally – The Times of India – Delhi News Daily
  • Norway: Massive sinkhole in Levanger engulfs motorway and railway; one dead – The Times of India – Delhi News Daily

Recent Comments

No comments to show.

You Might Also Like

Business

ACC Q1 Results: Cons PAT rises 4% YoY to Rs 375 crore, revenue up 18% – Delhi News Daily

Cement maker ACC on Thursday reported a 4% growth in its Q1 consolidated net profit at Rs 375 crore versus…

3 Min Read
Business

Two Sharp with ET: China blocks farm inputs, bullet train gear; Sensex surges 1,000 pts on oil drop – Delhi News Daily

China has quietly stopped clearing speciality fertiliser shipments to India, risking high-value crop output. It’s also holding back German tunnel…

1 Min Read
Business

Warren Buffett’s 7 point playbook for mutual fund investors – Delhi News Daily

Warren Buffett has never been one to follow trends. At 94, the Berkshire Hathaway chairman has steered clear of mutual…

6 Min Read
Business

Schloss Bangalore Q1 results: Leela Palace operator reports Rs 9 crore PAT vs Rs 75 crore YoY loss – Delhi News Daily

Schloss Bangalore, the operator of The Leela Palaces, Hotels and Resorts, reported a consolidated net profit of Rs 9 crore…

3 Min Read

Delhi News Daily

© Delhi News Daily Network.

Incognito Web Technologies

Welcome Back!

Sign in to your account

Username or Email Address
Password

Lost your password?