5 IT and industrial stocks to bet on in 2022

“We are of the view that this is a time to lighten positions in chemical and speciality chemical space. Although this space might remain attractive and may give decent returns, there is no point in entering this stock afresh. In this space, if you have larger positions, then it is a good time to start looking at reducing that,” says Daljeet Singh Kohli, CIO, Stockaxis.com.

Are you a bit surprised that the RBL Bank reaction has not snowballed for the Bank Nifty?
The reason it did not snowball into something big was probably the proactive action by RBI itself when they came out and gave that clarification that this was more to do with supervision and less to do with anything wrong with the bank itself. That gave a lot of solace to many investors. Now it is up to everyone whether they want to believe it or not but at least on the big regulator side, they have given great comfort to the investors. We have been out of this bank since a long time ago. So it makes no difference and we are not looking for any opportunity in that space also.

The speciality chemicals space has already had a great run so far. But looking at the valuations and the long-term growth opportunity, where are you comfortable adding positions within this pack?
Within this pack, we are reducing our positions for the last two-three months. Every rise is an opportunity to get out or reduce the position mainly because we believe that the major portion of the re-rating has already been done. From here onwards, we will see another big jump in growth in these stocks because all the expansion plans will fructify in the next two years.

We will have to wait in between this period of one-and-a-half, two years that will be the consolidation phase and re-rating normally does not happen in the consolidation phase. Re-rating happens when there is a transition happening. Therefore we are of the view that this is a time to lighten positions in chemical and speciality chemical space. Although this space might remain attractive and may give decent returns, there is no point in entering this stock afresh. In this space, if you have larger positions, then it is a good time to start looking at reducing that.

At the beginning of 2021 what were your top three holdings and at the beginning of 2022, which of these top three holdings are intact?
IT remains intact. We had Mastek, Persistent, KPIT, Infosys and TCS among IT stocks in at the beginning of 2021. Out of them, we are continuing with KPIT although with a much reduced position because the stock has given a lot of returns already and we have exited Mastek and Infosys. We are still continuing with TCS. Now we have added

in that space recently. So IT continues but we are adding more on industrials like ABB, Siemens.

Why are you holding on to a stock like TCS? Isn’t it expensive? Plus for two quarters they have not come out with a good set of numbers?
The last quarter they have not given a good performance but for IT as a whole, we are positive that this theme of digitalisation and plus cyber security and all of these things will continue. So taking a top-down approach, we are overweight in this sector. Now within overweight, there are stocks that one should continue to be. The underperformance of TCS is not because of the poor fundamentals and it is giving us a good opportunity to remain in it. Other stocks have given good performance and so we booked out after making good money. We are using that money within the same space. The laggard will ultimately perform.

We believe that TCS has no negative overhang on it or there is no problem with the company management, quality, etc. It is just that the stock has not performed in the last quarter. Normally we have seen with TCS that within the interval of two quarter results, it does not perform. It only performs near the quarterly numbers. Before going into the quarter’s numbers, normally the stock starts performing and then after the results, if it is in line or better then it continues otherwise it starts falling. It is a technical thing which is of no relevance to us. We are holding TCS for longer term as we have full faith in the company and we continue with that.

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