Deven Choksey bullish on IT stocks, sees Jio Platforms doubling profits in 4-4.5 years

Deven Choksey, Managing Director of DRChoksey Finserv Private Limited, believes the recent correction in information technology (IT) stocks has created an opportunity for investors to revisit the sector.

He is also positive on Reliance Industries, given the growth prospects of Jio Platforms, and sees room for gains in Jubilant FoodWorks following its recent correction.

Choksey noted that the downside for IT stocks is likely complete. HCL Technologies is successfully integrating the Anthropic cloud platform into its software development and cybersecurity offerings, allowing the company to deliver faster and more authentic solutions to clients.

He added, "I believe that this is a good move that we are experiencing, and many other IT companies are similarly experiencing the similar kind of integration with one or other LLMs."

Similarly, Tata Elxsi is executing existing contracts at higher margins across its transportation, media, and healthcare verticals, alongside a 50-basis-point margin improvement driven by foreign exchange gains.



"The downside in these stocks have been probably completed — if I want to put a bold statement here. It's time to buy them into the portfolio once again," Choksey said, adding that the sector is ripe for investment after being written off earlier.

Turning to Reliance Industries, the underlying story for Jio Platforms remains strong due to its comprehensive last-mile connectivity across mobile, enterprise, and home segments.

The telecom subsidiary reported earnings before interest, taxes, depreciation, and amortisation (EBITDA) of ₹76,000 crore last year and is currently clocking an 18% to 20% growth rate.

The stock was trading at ₹1,167.30 at 9:31 am on the NSE and has declined more than 15% over the past year.

At this pace, the business holds the promise to reach an EBITDA of ₹1,50,000 crore in the next four to four-and-a-half years. Reliance will continue to hold a 63% stake in Jio Platforms.

A projected market capitalisation of ₹12 lakh crore for the telecom unit would be directly incremental to the parent company's books, assuming a holding company discount of 15% to 20%.

In the capital goods space, Transformers and Rectifiers (India) delivered impressive performance driven by strong execution. While the business inherently requires a long working capital cycle from raw material acquisition to final delivery, robust demand for transmission and distribution infrastructure is driving higher transformer capacity utilisation.

On the consumer discretionary front, Jubilant Foodworks

offers limited downside risk following its recent price correction.

The company operates in the quick-service restaurant (QSR) segment, where a recovery in domestic consumption and demand during the festive season could support business performance.

The stock was trading at ₹421.10 at 9:32 am on the NSE and has declined more than 27% over the past year.

He expects seasonal demand to provide a near-term boost to growth over the coming months and quarters. The stock's recent price correction has also made valuations more attractive, in his view.

Choksey cautioned that the company may not command the exceptionally high valuation multiples it enjoyed in the past. However, he believes the downside from current levels could be limited, while a recovery in demand could support further gains.

“Maybe 15 20% appreciation from current level is not ruled out. In a good market, it can go even higher from current levels,” he said.

Disclosure: Reliance Industries Ltd, which owns Jio, is the sole beneficiary of Independent Media Trust that controls Network18, the parent company of CNBCTV18.com.

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