Sector Spotlight – Analyst Simi Bhaumik bullish on IT sector despite current market gloom; correction opens buying opportunity in these 4 stocks

Even as stock markets plunged on Monday with BSE Sensex falling below the 57,000 mark and the broader market Nifty50 settling below 17,000, the current market debacle is an opportunity to invest in IT stocks, technical analyst Simi Bhaumik said. She said that the long term view of IT sector remains strong and there are certain stocks that are a must buy for portfolios.  

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The Sensex on Monday ended at 56,747.14, falling by over 949 points or 1.65 per cent and the 50-share Nifty50 closed at 16,912.25, down by 284 points or 1.6 per cent. All 15-sectoral indices ended in the red Monday with Nifty IT, Nifty Healthcare and Nifty Pharma as the worst performing indices which lost 2.7 per cent, 1.8 per cent and 1.8 per cent respectively. 

Nifty IT fell by almost 968 points in the day’s trade with all the 10 stocks ending lower than the last closing of Friday. The top three losers on this index were Coforge Limited, Larse & Toubro Infotech Limited (LTI) and Tata Consultancy Limited (TCS). The stocks fell by 4.2 per cent, 4 per cent and 2.9 per cent respectively.  

Bhaumik said that the correct market correction is a good opportunity to invest in quality stocks. She said that IT sector is where she is putting her money to. The recommendations are however with a long term view at least 4-6 months. She advised investors to refrain from taking trading calls amid the market uncertainty.  

She said that she expects a base formation as we head to the Monetary Policy announcements that are scheduled on Wednesday. The rate-setting committee of the Reserve Bank of India (RBI) began its three-day meeting on Monday.    

TCS: Buy| LTP: Rs 3533| Target: Rs 4000/4200|Upside 19% 

The TCS shares ended at a discount of over 2.9 per cent or lower by Rs 109 from the Friday closing price. The stock has corrected significantly from the highs of Rs 3989. The TCS stocks have moved both ways over the last 3-4 trading sessions. 

Infosys: Buy| LTP: Rs 1694| Target: Rs 2200|Upside 30% 

Accumulation in Infosys shares is recommended from current levels, Bhaumik said. She said that this was another large cap IT player which has a long term gain potential and commands a space as a portfolio stock.   

This is another stock that lost over 2.3 per cent on the closing price basis on Monday.  

Coforge: Buy| LTP: Rs 5123| Target: Rs 6200|Upside 21% 

A major upside in Coforge shares is seen from the current levels. The targets suggested for this stock is between Rs 6000- Rs 6200. It was one of the biggest losers on Monday and lost over 4.2 per cent or Rs 227. It has been on a losing rally for two successive sessions.    

 Tata Elxsi: Buy| LTP: Rs 5702| Target: Rs 6400|Upside 12% 

Another top loser in this sector was Tata Elxsi and it lost over 3.3 per cent on Monday to settle at Rs 5702. The stock with market cap of over Rs 35,484 cr has also been on a losing side over the past 2 trading sessions.  

(Disclaimer: The views/suggestions/advices expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)