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Time of India
5 days ago
- Business
- Time of India
Mid and smallcap earnings to outshine Nifty 50 despite valuation concerns: Manish Sonthalia
"All in all, largecap would have minus one to plus one sort of a CC, constant currency, growth but the better numbers would likely be from the mid-tier players in the IT space. Again, on the IT side again, I would believe that most of the negatives are broadly in the price. If we were to take a next two-to-three-year point of view, these are basically buy on dips even for IT names," says Manish Sonthalia , Emkay Investment Managers . Well, so much to talk about in terms of the market momentum we have seen, you have earnings, you have some stock specific and sector specific action coming in. So, let us begin by talking about what the mood is like in the market right now because we have seen a serious range of consolidation recently. What is your take on the market? Do you believe that the kind of cool off we have seen could make for a good case on a buy on dip strategy sort of a thing or it is just a wait and watch momentum in the market right now? Manish Sonthalia: We have seen the markets rally one way from March onwards and we have seen the index rally up to 15%. And we are in the middle of the earning season. So, it is the nature of the markets that whenever you are in the earnings period, there is a lot of volatility. And because the markets have moved one way on the upside, there could be some selling that will come about in the earning season. But I would reckon that these are times to basically buy the declines that you are seeing. This is not a market where you are going to sell on the down tick, so that is what I understand. And it is supported by earnings, it is supported by macros, it is supported by global flows, all of that. So, I would believe that the market is a buy on dip. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Nissan Qashqai fırsatı Nissan TR Teklif Al Give us some sense that which sectors do you believe offer the best risk-reward at this point in time because we have just kickstarted the earning season, a bit of a disappointment coming in from the retail and the IT players. But any sector that you wish to flag off where you believe that the valuation, the growth outlook looks favourable and even the price points? Manish Sonthalia: Public sector banks, real estate, infrastructure, you will have capital market plays, consumption, discretionary consumption particularly even if the earnings do not come through this quarter, next quarter onwards you surely should be looking at some sort of an uptick in the consumption. So, these would be some of the plays I would believe would be outperforming the rest of the market this earning season. As far as the IT names are concerned, again it is not out of the ordinary TCS reported the numbers, pretty much in line adjusted for BSNL numbers. So, all in all, largecap would have minus one to plus one sort of a CC, constant currency, growth but the better numbers would likely be from the mid-tier players in the IT space. Again, on the IT side again, I would believe that most of the negatives are broadly in the price. If we were to take a next two-to-three-year point of view, these are basically buy on dips even for IT names. Live Events Last time we interacted, you were very positive on the entire insurance space, life as well as health insurance. Does that conviction continue? Manish Sonthalia: Absolutely. I would believe that on a sequential basis the health insurance names would see some sort of an uptick in terms of your profitability, the combined ratio would likely be better than what we have seen in the previous two-three quarters. And long-term trajectory in any case remains okay. And the valuations per se are very-very reasonable. Likewise, for even the life insurance players, even in the first quarter their growth was very-very decent. So again, out here life insurance has not seen too much of an action in terms of over the last two-three years. While we interact with the other market participants as well, they are always flagging off that concern with respect to the valuations, lower growth earnings, and what will eventually be the case with respect to the tariff. While it is good to note and it is good to hear from you that it is a buy on dips market as per you right now, but do not you think that there are some concerns for the markets of late or are you also pencilling in some of the risk factors or it is all good for the markets right now? Manish Sonthalia: Markets would have something to worry about at all points in time. We have never seen a market in my 30 years where they do not have anything to worry about, everything is hunky dory. So, having said that, you look at the anecdote as far as the valuations are concerned from the point of view of earnings. Fourth quarter number earnings was the best for the midcap and the smallcap space and that is where the maximum concern on valuations have been. So, while the Nifty 50 reported 2% YoY growth in the fourth quarter, operating profits were around 5% or 6%. The same number for, let us say, Nifty 50 next was around 27% growth. For, let us say, Nifty 150 midcap index, the earnings growth for fourth quart was 21%. For the smallcap 250 it was 20%. So, when the whole Nifty 50 is seeing a low single-digit sort of a growth, I mean the better growth numbers are coming in from the broader markets. Having said that, yes, historically the median valuations of Nifty 150 midcap was around, let us say, 30 times and today the index is valued at around 35 times, you will have to remove the outliers. You have very high allocations in some of the stocks which are trading at more than 100 PE. So, lopsidedness on some of the allocations, the index gives you a very skewed picture as far as the index PE multiples on the mid and smallcaps are concerned. But overall earnings trajectory for the mid and smallcaps are going to be much better even for this quarter. While the Nifty 50 earnings growth is likely to be in the range of 3% to 8%, I mean the midcap index projected earnings growth is going to be around 22-23%. And even for the smallcap index earnings protection is going to be around 10% to 15%. So, it is going to be better than the index per se and frontloaded dose of liquidity and cost of capital will only keep valuation slightly elevated and there is going to be a price inflation according to me because of the RBI actions and that would be supportive of the market as a whole. So, if one was to assume that markets will fall off a cliff, I would not think so. And in any case, markets do not remain in equilibrium, they undershoot or overshoot. This time around because of the earning support as well as the RBI actions, markets are more likely to overshoot rather than undershoot or stay in equilibrium. Also, give us your sense on some sector specific moves. Pharma is a space that you have liked for some time now, but the big overhang of the 200% tariff on pharma still continues. Does that change your stance on pharma? And do you believe that this 200% tariff could actually materialise on the space? Manish Sonthalia: No way. I mean, I would believe that first of all, you have a holiday on that tariff for the next one, one-and-a-half years and 200% tariffs in any case is not doable. Even after, let us say one, one-and-a-half years, you will have something coming up on that front. Generics is what supports the pharma industry in the US and if this is the amount of tariff, then obviously if there is a pass through of this 200% tariff, it is going to be extremely adverse for the healthcare sector as a whole for the US. But sticking with the tariff, everybody is waiting out for that final number with respect to the India-US tariff. But this time seems to be a little different with respect to the market reaction we have seen on April 2nd because from then till now with respect to the other geographies, Donald Trump has not made any big changes in terms to the numbers. Do you believe that if at all for Indian markets if we also come nearby to that 26% odd mark, it will be very well digested by the markets? Manish Sonthalia: No, I think 26% would be taken very adversely, 10 is already there. Any number between 10 and 15 would be positive for the markets. More than that this 500% tariffs because we import oil from Russia, I mean that is to be given more importance as to whether that is going to come or not come but otherwise markets are digesting today a number between 10% and 15%. If that be a case, then it would be a relief for the markets. Anything more than 15% in the vicinity of 20% or 26% would be negatively looked at by the market. What are you making of the tariff impact on the entire US macros? We have seen the bond yields that spiked up. The dollar index continues to be under pressure. Do you believe the tariffs are doing more harm than good to the US economy at present before they start playing out for the longer term? Manish Sonthalia: Absolutely. I mean, there is no doubt that ultimately the tariffs are going to be paid by American consumers give or take a bit here and there, that is about it, and it is going to be quite inflationary. And from the point of view of the fact is the repercussions on the US dollar, I would reckon it is headed on the downside and if that be the case, then it is going to be beneficial for emerging markets, India is a part of the emerging market and it would also tend to benefit from flows.
Economic Times
03-07-2025
- Business
- Economic Times
Sachin Shah on macro tailwinds that will boost Indian market, 3 sectors to bet on
Sachin Shah, Executive Director and Fund Manager, Emkay Investment Managers, says despite geopolitical worries like India-Pakistan and Iran-Israel-US tensions, the Indian equity markets surged, delivering 10-12% gains in April-May-June. Regulator confidence stemming from controlled inflation, GDP growth, as well as RBI support boosted the market. Subdued oil prices, significantly below India's tolerance level, coupled with a favorable monsoon outlook, further fueled sector banking, auto and CRAMS/CDMO space are the areas Shah is betting on. Markets have made peace with the fact that there will be uncertainties and a lot of contingent scenarios from the global front, but the rational approach would be to behave maturely. There are a lot of positives and India's strong macroeconomic foundation vis-a-vis GDP numbers as well as the inflation scenario. At the same time, for a shorter period, there is a lot of volatility which the market has to digest. What according to you are the macro tailwinds which will give positivity and a boost to the domestic markets? Sachin Shah: One of the best things is that the market always climbs the wall of worries and we have clearly witnessed that in the last three months. In May, we had India-Pakistan tensions, in June we had Iran-Israel-US tensions and in spite of all of this, if you see the quarter, at the indices level, Indian equity markets have delivered almost 10% to 12% gains in April, May, and June. I am sure company specific, smallcap indices have actually done even better. If I have to think about what has actually played out, there are two or three very important things. One of the most important things in terms of our confidence from the regulators is for our inflation, for our GDP growth, and the support from the RBI policy and also support from the government side. Another very important factor which has always been a challenge for the Indian economy has been oil prices. In spite of the Middle East tensions, oil continues to remain significantly below $80 which is typically our tolerance level at India GDP or absorption capacity. It is a good 15-20% below that level. So, RBI support on the liquidity side, the interest rate scenario, and the oil prices remaining very subdued and on top of it, of course, the monsoon outlook – all of this seems to be playing out quite well. So, whatever challenges we have seen in the last two or three quarters as far as slowdown in consumption and slowdown in the GDP growth is concerned, hopefully that all will be taken care of and we will see a decent amount of revival with all the factors that are playing out right now in the next two to three quarters. So, the outlook being much more optimistic is giving buoyancy to the markets. When we began this year, it was chaotic and then we got a bit of clarity in between and now as a world warrior, India is definitely standing out. As per your commentary, we can expect a lot of optimism. Having said that, since we are focusing on specific sectors now, the second half of this month is very important. You said the coming two to three quarters would be very defining for India also if everything goes well, especially on the macro level and globally. What is your take on sectors? Where are you undervalued or where have you gone aggressive? Sachin Shah: There are two parts to your question. One is in terms of where the sectors are relatively undervalued and also, maybe not very undervalued but where the growth outlook seems to be very secular, much stronger as we move ahead over the next couple of years. So, from a valuation perspective, clearly what we like at this point in time is the private sector banking. We believe that some of the leaders are very reasonably priced and will be able to manage this pressure on the NIMs after this one or two quarters and they will again bounce back very strongly as far as the profitability and the bottom line growth is concerned. I do not think there is any challenge anyways as far as their deposit or credit growth is concerned and that will continue to do well. But maybe a couple of quarters here and there, in terms of profitability, but that should also be taken care of because the kind of the strong franchises that they have and the valuations are very reasonable over there, so that is definitely one of our top betting sectors at this point in time. Even within the auto space, although currently monthly numbers are somewhere between subdued to not so great, but thanks to the RBI policies and the liquidity coming back in the markets, we expect that sometime around the festival season, demand should come back very strongly. But over there, the more important thing is to play the premiumization story. It is not just a pure volume game, and so we will have to look at the value growth rather than just the volume growth there. Also not only value growth at the top line but value growth for profitability because typically the premiumization story gives better profitability. The EBITDA growth will be far better in some of the businesses out there. Auto is another sector where we believe risk-reward is favourable although near-term, there may be a subdued kind of volume numbers. Other than that, it's the next two-three years kind of a secular story. The themes that we have been liking for the last three-four years. We believe it still has long legs. One is, of course, contract research and manufacturer, the CDMO space particularly in the pharma side. So, in the CRAMS and the CDMO space, some of the companies have tremendous tailwind whether it is China plus one, whether it is Europe plus one. All of that seems to be now culminating into really strong order books and order inflows and execution will continue over the next 6, 8, 12 quarters and we can clearly see that with the kind of the capex that is happening at the ground level for some of those companies. That is a very big secular thing that should continue for at least the next two, three, five years. The other one is also in terms of the manufacturing sector companies which are focused on both the domestic and the export side. These are some of the themes that we are quite positive about. The markets have truly recognised the theme of manufacturing ever since the government began talking about the Atmanirbhar Bharat. But taking it from there and on the global front, Trump is turning up the heat on the trade talks, saying he has no plans to extend the July 9 deadline. But he adds that there is going to be a great deal with India. All positive news flows at present on the face of it? Do you have a take on it? Sachin Shah: The way to look at it is that this tariff is a relative game because the tariff is not only for India, but it is also going to be for multiple countries and at least in the first round of tariffs that we saw, clearly India was much better positioned. Of course, after that a lot of negotiations continued to happen and I am sure things will get better only. But the more important thing to focus on is what is the value proposition that our companies offer to the customers, particularly in the US or the European markets, and if we are really giving them a great value proposition? For example, whether it is textiles, electronics manufacturing, or engineering, and within that hardcore engineering or some of the power equipment and then the auto and auto ancillary and contract research and manufacturing and specialty chemicals?At least in these six or seven industries, Indian corporates have demonstrated that they have the domain expertise and they can deliver the scale to meet the global demand and they respect intellectual property rights. So, we have earned the right to win there and clearly over there, with the value proposition that our companies have, the tariff if at all, will be a pass through to the customers over there because these businesses are not making some crazy kind of ROCEs or ROIs where they can absorb this. It is going to be a mutual understanding between the end customer and the Indian manufacturer how to manage this. But because we have a strong value proposition relative to any other competitive countries, at least the six-seven industries have a very strong outlook for the next three to five years.
Economic Times
21-05-2025
- Business
- Economic Times
FII flows turn positive; long-term capital returning to India: Sachin Shah
"Clearly, US corporates are looking at global alternate, supply chains are getting created, and multiple countries whether it is India, Indonesia, Vietnam, South America whichever company or whichever corporates will have their own strengths, they will get their share of business, so that is a mega trend that we are going to witness over the next three, five, seven, ten years and we strongly believe that will continue," says Sachin Shah, Emkay Investment Managers. ADVERTISEMENT Now Moody's upgrade has come in. China has also decided to cut its lending rate and, of course, China and the United States are engaged in a slew of discussions with respect to the trade deal, the interim trade deal that they signed. How do you expect all of this global market action to have an impact on the India market? Sachin Shah: So, the good thing is that the trade war that we were all witnessing for the last few months, the intensity over there seems to be cooling off quite significantly from US with most of the countries, so that is a very positive thing and Indian companies obviously wherever we have a strong value proposition from each of our businesses, this is what I have mentioned a few times even earlier on this show, that wherever we have our strong value propositions whether it is your speciality chemicals, pharmaceuticals, textiles, electronics, manufacturing, engineering, quite a few other industries I do not think there is going to be any challenge over there. Clearly, US corporates are looking at global alternate, supply chains are getting created, and multiple countries whether it is India, Indonesia, Vietnam, South America whichever company or whichever corporates will have their own strengths, they will get their share of business, so that is a mega trend that we are going to witness over the next three, five, seven, ten years and we strongly believe that will continue. So, can we also say we have moved from chaos to clarity because the world is reshuffling and India definitely is standing out. The kind of cues and triggers you just mentioned, the kind of sectors that is going to benefit now, do you think among the emerging market pack India is definitely going to stand out in a couple of quarters' time frame that you just mentioned? Sachin Shah: Well, we definitely believe so and it is not that we will have a share for all the businesses, but at least there are seven or eight sectors where we believe that Indian corporates have the right to win. They have demonstrated that they have the domain expertise. They have demonstrated that they can deliver the scale for the global demand and where they also respect the intellectual property rights. So, whether it is auto ancillaries, speciality chemicals, pharmaceuticals, electronics manufacturing, engineering and within engineering I would say hardcore engineering, power equipments, textiles, so these are few sectors where we believe that Indian corporates, Indian companies have clearly demonstrated the right to win and over the next two-three quarters, we are really standing out in terms of our incremental market share that we are going to gain over the next few years. So, you are suggesting that there is going to be an incremental market share that India is going to corner with respect to the other emerging markets, but is that the view that you hold for FIIs as well and, of course, now that at the moment the India-Pakistan skirmishes, well both sides have agreed for an understanding, a larger understanding, minister Piyush Goyal is also in the United States, but what could be the next big trigger for the Indian markets to sort of have a disproportionate movement. Sachin Shah: So, as far as foreign institutional investors are concerned, the trend is clearly reversed there. Since the month of March, April, and even May we are seeing significant amount of positive flows on a continuous basis and even if you see some of the hardcore data, the selling started sometime in I would say September 24 or October 24, they sold almost worth two lakh plus crores from October till February or March and that was the number that they had bought from January 24 to almost September 24th. ADVERTISEMENT What I am trying to say is that the hot money which had come in probably went out and it got more or less settled and now we are seeing very decent amount of, very-very stable long-term money which is we are getting. (You can now subscribe to our ETMarkets WhatsApp channel)
Time of India
21-05-2025
- Business
- Time of India
FII flows turn positive; long-term capital returning to India: Sachin Shah
"Clearly, US corporates are looking at global alternate, supply chains are getting created, and multiple countries whether it is India, Indonesia, Vietnam, South America whichever company or whichever corporates will have their own strengths, they will get their share of business, so that is a mega trend that we are going to witness over the next three, five, seven, ten years and we strongly believe that will continue," says Sachin Shah , Emkay Investment Managers . Now Moody's upgrade has come in. China has also decided to cut its lending rate and, of course, China and the United States are engaged in a slew of discussions with respect to the trade deal, the interim trade deal that they signed. How do you expect all of this global market action to have an impact on the India market? Sachin Shah: So, the good thing is that the trade war that we were all witnessing for the last few months, the intensity over there seems to be cooling off quite significantly from US with most of the countries, so that is a very positive thing and Indian companies obviously wherever we have a strong value proposition from each of our businesses, this is what I have mentioned a few times even earlier on this show, that wherever we have our strong value propositions whether it is your speciality chemicals, pharmaceuticals, textiles, electronics, manufacturing, engineering, quite a few other industries I do not think there is going to be any challenge over there. Play Video Pause Skip Backward Skip Forward Unmute Current Time 0:00 / Duration 0:00 Loaded : 0% 0:00 Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 1x Playback Rate Chapters Chapters Descriptions descriptions off , selected Captions captions settings , opens captions settings dialog captions off , selected Audio Track Picture-in-Picture Fullscreen This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Text Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Transparent Caption Area Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Drop shadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Moose Approaches Girl At Bus Stop In National Capital Region - Watch What Happens Happy in Shape Undo Clearly, US corporates are looking at global alternate, supply chains are getting created, and multiple countries whether it is India, Indonesia, Vietnam, South America whichever company or whichever corporates will have their own strengths, they will get their share of business, so that is a mega trend that we are going to witness over the next three, five, seven, ten years and we strongly believe that will continue. So, can we also say we have moved from chaos to clarity because the world is reshuffling and India definitely is standing out. The kind of cues and triggers you just mentioned, the kind of sectors that is going to benefit now, do you think among the emerging market pack India is definitely going to stand out in a couple of quarters' time frame that you just mentioned? Sachin Shah: Well, we definitely believe so and it is not that we will have a share for all the businesses, but at least there are seven or eight sectors where we believe that Indian corporates have the right to win. They have demonstrated that they have the domain expertise. They have demonstrated that they can deliver the scale for the global demand and where they also respect the intellectual property rights. So, whether it is auto ancillaries, speciality chemicals, pharmaceuticals, electronics manufacturing, engineering and within engineering I would say hardcore engineering, power equipments, textiles, so these are few sectors where we believe that Indian corporates, Indian companies have clearly demonstrated the right to win and over the next two-three quarters, we are really standing out in terms of our incremental market share that we are going to gain over the next few years. Live Events So, you are suggesting that there is going to be an incremental market share that India is going to corner with respect to the other emerging markets , but is that the view that you hold for FIIs as well and, of course, now that at the moment the India-Pakistan skirmishes, well both sides have agreed for an understanding, a larger understanding, minister Piyush Goyal is also in the United States, but what could be the next big trigger for the Indian markets to sort of have a disproportionate movement. Sachin Shah: So, as far as foreign institutional investors are concerned, the trend is clearly reversed there. Since the month of March, April, and even May we are seeing significant amount of positive flows on a continuous basis and even if you see some of the hardcore data, the selling started sometime in I would say September 24 or October 24, they sold almost worth two lakh plus crores from October till February or March and that was the number that they had bought from January 24 to almost September 24th. What I am trying to say is that the hot money which had come in probably went out and it got more or less settled and now we are seeing very decent amount of, very-very stable long-term money which is we are getting.
Time of India
19-05-2025
- Business
- Time of India
PSU theme to regain spotlight amid earnings strength: Manish Sonthalia
"According to me, the PSU theme will again come back into the limelight, you have a certain pockets of these and, of course, all the PSU names are up from their lows to say the least and that is where I stand as far the PSU pack," says Manish Sonthalia , Emkay Investment Managers . Also, help us with your take and the latest take rather on insurance pack because I know that you will not talk stocks, but if I can name some, then Star Health as a whole is up around 22% just in the week gone by. HDFC Life hitting its 52-week high and even SBI Life seems to be catching up. Very select counters when it comes to the life insurance space. Give us some sense that what is your current take on this particular segment as well as are you still holding your positive stance on this one? Manish Sonthalia: Yes, very positive on both the life insurance and the health insurance space particularly on account of valuations and bulk of the 80C impact because individuals are transitioning from an old regime to a new regime where there is not any deduction available for life insurance. So, given that most of the fear around the life insurance was that life insurance as a product was taken primarily because of tax breaks on 80C, I mean that has now come in the base and you are looking at pure protection as a mechanism for the life insurance companies. Valuations are very-very decent so to speak and broadly you could assume that on a long-term basis if you assume that life insurance or maybe even a health insurance is at the base case or the worst possible situation would be growing at around 15%. Now, whether a 15% growth into the future has got priced in in the current valuation, I would tend to defer. So, from that point of view, the established life insurance names plus the major health insurance names which you took, there is going to be price increase and you are looking at valuations in and around three-time price to book. Of course, there was pain on the underwriting segment and now that has got broadly priced in so to speak and on this current base most of the good health insurance companies, I mean I am alluding to the private ones and not the public sector ones, they would be working towards combined ratio of closer to 95-96% going into the future. Worst of the pessimism in the health insurance names according to me is again priced in. Live Events But let me put the spotlight on these narrative theme stocks. When you talk about the narrative theme, last year you did see that rally come about in the PSU counters be it the power space, be it defence, be it for that matter of fact railways as well, and if I could add to that list QSR space, also saw a lot of excitement when you talk over the last one, one-and-a-half years or so. Do you think they will make a comeback and should now people actually avoid or investors avoid looking at this entire narrative theme and look at select pockets where you have valuation comfort instead? Manish Sonthalia: The psu theme broadly according to me has again seen the worst. The PSU pack as a whole going forward is likely to outperform the markets. Already, a lot of pessimism has got built into it and the last six-nine months has been very damaging for the PSU space as a whole. It is coming back from the lows. Earnings growth broadly are intact for most of the well-known PSU and you have valuations which have got corrected. So, according to me, the PSU theme will again come back into the limelight, you have a certain pockets of these and, of course, all the PSU names are up from their lows to say the least and that is where I stand as far the PSU pack. I was never very bearish on PSU as a space, but now I have been more bullish because the valuations have come up and earnings growth is intact, dividend yields are very good. As far as the QSR space is concerned, this quarter numbers again is a mixed bag. Some of the names particularly the pizza ones have delivered good numbers, but valuations are exorbitant. The burger space, again the numbers have not come in as expected, but still keeping the faith as far as FY27 projections on some of these companies are concerned, the turnover guidance which they have given and even the operating leverage on the margin front should come through. Of course, you cannot really expect a runaway growth because the valuations are slightly on the elevated side, but these are very decent quality businesses where if the earning growth comes through, then broadly I expect that the second half of this year would be better than the first half of this year in the QSR space and broadly if I am bullish on consumption, then this is one space which would stand out, some of the names like your Jubilant or, let us say Zomato which are there in our portfolio, we tend to stick with these guys and believe that they could deliver broadly in the medium to long term. You have spoken about QSR. We have touched upon consumer discretionary. But what is your view when it comes to core FMCG because this time volume growth has been better than expected even though it is nominally better, but still it has been better than expected. Revenue expansion has happened in across the board. What is your take when it comes to core FMCG given that on the fundamental side, we are also expecting a very good monsoon this year and although urban demand has not picked up to the extent we would have liked it to be, it is still now picking up some ground when compared to rural demand. So, what is your take on FMCG now? Manish Sonthalia: The only concerning fact is the valuations vis-à-vis the growth. I mean you cannot expect more than a 10% to 12% sort of a revenue growth and, of course, companies would be vying for the volume growth per se because inflation is going to be very benign. So, it is a pick and choose where growth vis-à-vis valuation has to come into perspective. On a broad basis consumption would tend to get a lift broadly now that the IMD has predicted good monsoons even this year. Rural economy is coming out of the corner from the last two years downturn and these would help at the margin. On the headwind side in the FMCG names, it is going to be your valuations. There is nothing more to basically look into it, it is basically growth and valuations, it will be a pick and choose. ETMarkets WhatsApp channel )
