Never miss a great news story!
Get instant notifications from Economic Times
AllowNot now


You can switch off notifications anytime using browser settings.

Portfolio

Loading...
Select Portfolio and Asset Combination for Display on Market Band
Select Portfolio
Select Asset Class
Show More
Download ET MARKETS APP

Get ET Markets in your own language

DOWNLOAD THE APP NOW

+91

CHOOSE LANGUAGE

ENG

  • ENG - English
  • HIN - हिन्दी
  • GUJ - ગુજરાતી
  • MAR - मराठी
  • BEN - বাংলা
  • KAN - ಕನ್ನಡ
  • ORI - ଓଡିଆ
  • TEL - తెలుగు
  • TAM - தமிழ்
Drag according to your convenience
ET NOW RADIO
ET NOW
TIMES NOW

Bullish on these 3 sectors in next few months: Pankaj Pandey, ICICIdirect.com

ET Now|
Updated: Sep 14, 2018, 10.30 AM IST
0Comments
pankaj-pandey2-FINAL
We would expect a sharp bounce in rupee like we had seen in 2013, Pankaj Pandey, HoR, ICICIdirect.com, tells ET Now. Pandey is betting on auto, cement and selective pharma stocks.

Edited excerpts:


What is your assessment of the macros? The IIP and CPI numbers have been good. Tomorrow the government is giving its assessment on curbing the rupee fall as well as looking into crude oil prices, the prime minister’s economic review. What exactly are you anticipating?

Domestic growth is a variable for the market. We had one of the fastest growths in last quarter and about 50% of bottom line and 24% of top line growth last quarter for Sensex companies excluding banks.

The outlook for the next two years in terms of growth is fairly robust at about 20% kind of CAGR growth. Domestically, earnings are in absolutely fine shape. Domestic sentiments are also relatively far more fine. Where the challenge is coming is on the global sentiment side. It is very difficult to take a call in terms of how the trade negotiations will pan out and the consequent impact on the Indian rupee and crude.

Both rupee and crude have been impacting our domestic inflation scenario. We have seen a decent amount of crack in the market but not good enough for lumpsum investment. We would expect the markets to consolidate for the next one or two months till the time we get clarity on the global situation.

Domestically, we are doing absolutely fine. I do not think that the RBI or the government will be very keen on looking at or protecting the rupee in a big way but we would expect a sharp bounce like we had seen in 2013 as well. But having said that, globally things are still volatile and are still shaping up. It is very difficult to take a directional call on the markets. But we expect that 11,000 levels will be held and within sectors, there are some pockets which have not really performed in the past few months and which we expect to sort of do well. One of them is auto. We have not seen really a decent price performance from most of the auto players.

As we are heading into the festive season and the overall monsoon and most of the domestic variables have been good, we would expect a decent amount of sales even though there is a concern on the margin front given that some of the commodities have inched up.

Another sector which we like is cement. There also, we would expect construction activity to overall pick up in the next few months and in addition to that, we had seen good volume growth last quarter. The only challenge is on the pricing side wherein we feel that the pricing could firm up in the coming months and that will be a positive.

Besides these two sectors, we would expect selective performance from pharma, especially exporters. Domestically, we would expect most of the players to keep on delivering a decent set of numbers with 10% to 12% kind of growth. Some of that is baked in prices but we expect that segment to keep doing well and in addition, you can look at certain pockets like the hospitality space which has not really done so well.

We have seen a decent amount of price crack also and structurally these segments can be looked at. But having said that, we would expect markets to consolidate for the next one or two months because the global situation will keep evolving. Domestically, we are doing fine but that is not a bigger worry for us.

What is your take on Tata Motors? Has the stock reached a bottom?

Actually, no. We have removed it some time back from our portfolio. Within Nifty, this is the worst performing stock, down by about 40 odd percent. Within the portfolio, domestic as a segment is doing extremely well including both CVs and passenger vehicles.

In fact, in CVs too, the margins are fairly robust given the fact there were concerns that the company might offer higher discounts to gain market share which it had lost some time back. But the bigger concern is on the global side. The company has lined a big capex globally and EV is still an evolving space. We are not very comfortable in terms of what kind of payoffs we might get given the fact that the company is going to spend aggressively in the next two-three years. That is where the bigger concern is coming from and other markets are facing margin challenges.

For example, China is a big market for them and that is where we are seeing concerns on the margin front. If you sum it up, it is challenging for a stock to buy at this level and given the fact that it has declined 40%, some bit of technical bounceback can happen but we do not expect a price performance for the next two or three years.

That is why, besides technically, one should not be chasing this stock at this point in time.

0Comments

Also Read

3 solid contra trade ideas from ICICIDirect's Pankaj Pandey

Here are 3 stocks that need rerating after a strong show: Pankaj Pandey, ICICIdirect.com

ICICIdirect’s Pankaj Pandey is positive on this ADAG stock

Nifty faces immediate hurdle near 10,350, says ICICIdirect

Comments
Add Your Comments
Commenting feature is disabled in your country/region.

Loading
Please wait...