The brokerage has increased its weight and remains ‘overweight’ on Banks, Cap Goods and Healthcare, and diversified financials (led by HDFC AMC). It is ‘equal weight’ on IT and ‘underweight’ on Auto, Metals, Cement, Consumer and Oil & Gas.
Q2FY24 results expected to be quiet for internet companies, with sequential increase in majority of companies. Profitability still the focus in internet sector, stocks expected to react to leading indicators for Q3FY24.
Indian IT firms are likely to report softer Q2FY24 numbers due to headwinds in key markets, leading to a decline in EBIT margin on a YoY basis. Q2FY24 numbers may be better than last quarter but may still fail to meet expectations.