Mumbai, Jan 17: HSBC Securities and Capital Markets (India) has recommended an "overweight" on the cement sector. According to a `India : Strategy 2001' report issued by the brokerage house, the valuations in the sector seem to be attractive. The sector growth is going to accelerate, albeit on a lower base, from around 64 per cent in FY01 to 76 per cent in FY02, said the report. HSBC is positive on the sustenance of high cement prices.The brokerage house is also overweight on the pharma sector. The major growth drivers for this sector, they feel, would be export sales as the overall domestic sales growth in the pharma sector is expected to be in the region of only around 12 per cent. Specialty segments such as cardiovasculars, antidiabetics and CNS are doing well, according to the report.
With respect to the IT services sectors, the report said that, giving a bear call would be like bolting doors after the IT horses of high valuations have run away.
The report said that the slowdown in IT investments in the West would lead to more value-based outsourcing. As per the report, these are the times when US corporates would resort to cost arbitrage, that is, getting projects done offshore.
HSBC report quoting a Nasscom study says, nearly 18 per cent of the total IT spend by US corporates falls in the area where it is easily offshoreable to India and India's market share is still less than 1 per cent of the overall market. As per the study, outsourcing from India is bound to increase. Most of the Fortune 500 companies have indicated that they would increase outsourcing. Moreover, most of the Indian IT companies have committed clients.
Copyright © 2001 Indian Express Newspapers (Bombay) Ltd.
