Bearish on Wipro and Infosys, TCS and HCL attractive: Saurabh Mukherjea

ET Now spoke to Saurabh Mukherjea, Head of Equities, Ambit Capital, on IT stocks .

Could you throw more light on what exactly you meant when you said that Wipro currently is standing at a very important strategic crossroad?

The Indian IT sector faces some key calls over the next couple of years. The IT giants can take one of two routes. They can either choose to focus on scale i.e. become the outsourcing gorilla, becomes one or two of the largest outsourcing players in the world. TCS seems to have clearly chosen that route. They will focus heavily on outsourcing and become the biggest of its kind in the world. The other route that's open to Indian IT is that choose to become something like an Accenture, high front-end consultancy skills, high boardroom connects into the Fortune 500. HCL Tech has clearly chosen to take that route. Where Infosys and Wipro are struggling is they have not quite made up their mind. Will they take the outsourcer route or will they take the front-end consultancy i.e. the Accenture model? Unless you make your mind up, you will get caught between these two business models and unfortunately that's where Infosys and Wipro increasingly find themselves at.

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