Why Mphasis & LIC Housing Are Back in Focus Despite I.T. And Insurance Sector Concerns?

Mphasis and LIC Housing Finance have emerged as fresh portfolio picks, driven by attractive valuations and improving relative value. Jitendra Sriram, Senior Fund Manager, Baroda MF, says both companies offer an opportunity where valuations have fallen significantly compared with their underlying fundamentals and peers. In I.T., repeated valuation cuts linked to AI concerns and weaker growth expectations have pushed dividend yields higher, improving the risk-reward equation. While near-term growth may remain moderate, the valuation gap has become increasingly attractive. The strategy focuses on identifying fundamentally sound businesses trading at discounts, creating potential opportunities as valuations normalise and investor sentiment improves.