As investors may be on the lookout for top wealth creation opportunities in the new year, top fund manager, Nilesh Shah of Envision Capital says that 2018 could be a comeback year for the Indian IT sector. “I probably think 2018 could be the comeback year for Indian IT. If we look at it over the last several years, some of the IT companies have been grappling with the demand environment, with basically pricing environment, with some of them grappling even with leadership issues and on top of that the currency. What we believe is that in 2018, a lot of these concerns or a lot of these headwinds would in a way go away and 2018 could be a reasonably solid year for Indian IT companies,” Nilesh Shah told in a recent interview to ET Now.
Taking stock of the year gone by, Nilesh Shah said, “ 2017 has been a fantastic year and the strength that we have seen in the flow of liquidity is something that should surely spill over into 2018, especially the early part of 2018. Obviously, the most important event is going to be the Budget and its details and numbers. Till then, we seem to be on a pretty solid wicket.”
Sharing his observation regarding the valuation in the markets overall, Nilesh Shah says that it still opportunity in select space. “There are pockets of exuberance in the market and you could clearly say that there are pockets of complacency but at the aggregate level, we should be fine. Clearly, valuations at the aggregate level are high but there are pockets of opportunity. Some of the risks at the global level are surfacing and we clearly need to kind of get into 2018 with some concerns in terms of global liquidity,” the expert noted.
In terms of the major triggers for the markets, Nilesh Shah says that monsoon will be key in 2018. “The last two years have been reasonably good for monsoons and we have to hope that even in 2018 we will have a normal monsoon. If it is normal, it will relieve the government of some pressure in terms of its allocations to the agri and the rural sector but if it is not a normal year for monsoons, then clearly the government will have to spend more on agriculture and rural and that essentially could be an additional cause of worry for the bond markets,” Nilesh Shah told in the same interview.