The auto sector is likely to witness a 25 percent year-on-year (YoY) decline in earnings, while IT companies will record a 13 percent profit growth in the March quarter, said Gautam Duggad, head of research, at Motilal Oswal Institutional Equities.

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“We are expecting more than 25 percent year-on-year (YoY) decline in earnings for our auto pack which will be the third consecutive quarter of more than 20 percent YoY decline in profits,” he said.

Over the last four-five quarters, IT sector has seen a very consistent double-digit profit growth, with the tier I companies outperforming in terms of profit growth in the last three-four quarters, noted Duggad, adding that this is likely to happen this quarter also. "Our own estimates are for 13 percent profit growth for IT in this quarter and reasonably strong topline growth as well which is typically a weak sort of a quarter seasonally.”

“Cement has been more of a trading bet over the last couple of years. The reasons are not very difficult to find. If you see last ten years of cement profitability, the 2008 profits of cement universe of Rs 10,000 crore and 2018 profits of Rs 10,008 crore," he said.

The recent upmove that you have seen in the cement stocks has largely led by two factors, said Duggad. "One is the quarter-on-quarter (QoQ) decline in some of the key raw material elements whether it is freight cost or pet-coke cost and that is incrementally driving some interest in cement stocks."

"Secondly, anybody who wants to play the infrastructure space in India today has very limited options. What we have done in our model portfolio yesterday is replaced Shree Cements with ACC because we think the profitability gap there has narrowed and product mix has also improved plus there has been some cost rationalisation which is underway at ACC. So within largecap, that is what we like in the cement space,” he added.

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