key Outlook<\/p>\n
\u00b7 Market has witnessed good broad based bounce-back after the Government\u2019s announcements on various fronts in the last 2-3 months. Some of the positive announcements have been reversal of tax surcharge on FPI investors, Corporate Tax cuts, measures to enhance liquidity, PSU bank mergers.<\/p>\n
\u00b7 The sentiment has turned positive, overall liquidity is improving, MSCI weightage for India has increased and Retail+HNI participation is high.<\/p>\n
\u00b7 Most stress in Auto & NBFC is over. Markets will be driven by earnings which seem to be back on track.<\/p>\n
\u00b7 Historically when P\/E is depressed and earnings grew, markets have done well. Right now, P\/Es\u2019 are at reasonable levels and thanks to government initiatives earnings are starting to pick up.<\/p>\n
\u00b7 Monsoon has been longer than usual which has affected kharif crops but reservoir and underground water levels are good and so outlook for agriculture is good.<\/p>\n
Sector Outlook<\/p>\n
\u00b7 Auto \u2013 The sector has suffered due to earnings de-growth and P\/E compression. Earnings were hit as all sub-sectors CV, PV and 2Ws slowed down together. But after production cuts, inventory with dealers is decreasing and sentiment is improving. We are neutral to positive on this sector going forward as we believe that as earnings start coming back, this sector will start looking up.<\/p>\n
\u00b7 BFSI \u2013 Insurance companies did well as they were undervalued and they were re-rated. There is a clear demarcation in valuations of PSU banks, Private Banks, NBFCs and Insurance companies. NBFCs with strong parentage and robust retail books continue to look good. Select retail and corporate banks continue to look promising.<\/p>\n
\u00b7 Construction & Cement \u2013 This sector is struggling as the Government capex has slowed down especially in states like Andhra Pradesh. Valuations are reasonable and expect a re-rating of the sector soon. Cement is expected to do well given the focus on infra spend.<\/p>\n
\u00b7 FMCG + Consumer Discretionary \u2013 This sector is expected to be one of the greatest beneficiaries of corporate tax cuts as most companies were paying full tax. Many companies in this sector are expected to go through an earnings revision.<\/p>\n
\u00b7 Metals \u2013 We are not very constructive on this sector so donot own much. We also donot expect big uptick in earnings as global demand is weak.<\/p>\n
\u00b7 Oil & Gas \u2013 Fairly valued currently, have built up exposure in Reliance.<\/p>\n
\u00b7 Pharma \u2013 Good opportunities available, some stock specific events hurting valuations but haven\u2019t hurt stock prices due to already low multiples. Prefer owning Domestic Pharma. Pharma stocks added over the past year have given good returns.<\/p>\n
\u00b7 IT \u2013 Expect stable earnings growth in low double-digit.<\/p>\n","protected":false},"excerpt":{"rendered":"
key Outlook \u00b7 Market has witnessed good broad based bounce-back after the Government\u2019s announcements on various fronts in the last [\u2026]<\/span><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[3],"tags":[],"yst_prominent_words":[400,396,392,388,338,325,387,394,389,397,398,391,401,403,399,393,332,269,390,395],"_links":{"self":[{"href":"https:\/\/myassetsconsolidation.com\/blog\/wp-json\/wp\/v2\/posts\/1088"}],"collection":[{"href":"https:\/\/myassetsconsolidation.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/myassetsconsolidation.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/myassetsconsolidation.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/myassetsconsolidation.com\/blog\/wp-json\/wp\/v2\/comments?post=1088"}],"version-history":[{"count":1,"href":"https:\/\/myassetsconsolidation.com\/blog\/wp-json\/wp\/v2\/posts\/1088\/revisions"}],"predecessor-version":[{"id":1089,"href":"https:\/\/myassetsconsolidation.com\/blog\/wp-json\/wp\/v2\/posts\/1088\/revisions\/1089"}],"wp:attachment":[{"href":"https:\/\/myassetsconsolidation.com\/blog\/wp-json\/wp\/v2\/media?parent=1088"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/myassetsconsolidation.com\/blog\/wp-json\/wp\/v2\/categories?post=1088"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/myassetsconsolidation.com\/blog\/wp-json\/wp\/v2\/tags?post=1088"},{"taxonomy":"yst_prominent_words","embeddable":true,"href":"https:\/\/myassetsconsolidation.com\/blog\/wp-json\/wp\/v2\/yst_prominent_words?post=1088"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}