Earnings growth to drive valuation of IT stocks higher: Deepak Shenoy
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Last Updated: May 03, 2021, 05:38 PM IST
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"We pay 80 times earnings to companies like Nestle which will grow at 10-15%, then why would we not pay 25 times earnings to a company that has the potential to grow 30%, especially in a pandemic," says Deepak Shenoy
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Deepak Shenoy, founder, Capital Mind, reasons that earnings growth will drive valuations of IT stocks. "If you are paying 30 times earnings today, you might actually see the company growing at 30-35%. We have seen a number of IT companies doing that, even through the lockdown. I do not believe this is a point at which you can write off further growth. If growth is there, valuations will come," Shenoy says in this interview. Edited excerpts.