Neutral on IT stocks: Rajat Jain, Principal Mutual Fund

In a chat with ET Now, Rajat Jain, CIO, Principal Mutual Fund, shares his views about IT stocks.

Is it too early to buy IT stocks, they have corrected on an average by about 15% plus but large cap IT stocks are still expensive, TCS is trading at a PE multiple of 17 times, Infosys 14-15 times, HCL Technologies still about 13 times?

The markets kind of extrapolating what is happening on the US and European markets and the sense is that as economy slow, probably IT spends take a knock and that flow slows to Indian companies. Markets kind of taking that extrapolation but we have also seen that their margins are generally compressing in the past so at some valuation they will be interesting but we are in our portfolio have neutral bit on IT stocks.

Source: http://economictimes.indiatimes.com/markets/stocks/views/recommendations/neutral-on-it-stocks-rajat-jain-principal-mutual-fund/articleshow/9550838.cms