The midcap opportunities should come in the core manufacturing side partly linked to the automobile industry and partly linked to the capital goods industry; chemical companies and construction companies, said Mahantesh Sabarad, Head, Retail Research, SBICAP Securities, in an interview with ETNOW.
Edited excerpts:
Within the broader universe, where do you think are the pockets of outperformance in earnings? Where do you some visibility of a catch up happening?
First and foremost, what we have seen in the Nifty earnings is that the PSU banks have given significant improved performances from a PAT perspective. Most of them were showing losses. They have either contained the losses or converted them into profits. That is a big pocket of outperformance. Something similar has happened in t ..
Both these have seen the increase in profits come in from lower provisions as the NPA cycle is now nearing its end and therefore the prospects are brighter.
The second pocket where we saw better than expected performance is from the oil marketing companies. Although the refining margins have not gained massively, there has been a marked improvements in the way they have given their performance. So the prospects are looking a little brighter and some of the capital goods companies have ..
When we are talking about the EPS being at the highest ever, what is your outlook going forward? How attainable or sustainable do you think that is?
EPS may be at its peak or at its highest level now but the growth has been quite tepid. I would not even look at just past one year growth. Let us look at the last three to four years. Whatever measures you want to look at, the earnings growth has been quite tepid. It has been in single digit in terms of annualised growth rate. But as we look forward, most analysts have been factoring in a much sharper growth. Either that growth will happen this year which is FY20 or there is some growth that co ..
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