Latest news with #JyotivardhanJaipuria
Time of India
a day ago
- Business
- Time of India
Nischal Maheshwari on 2 sectors where we may see rays of hope in market
Nischal Maheshwari , Market Expert, says FMCG and cement sectors are set to experience better volumes. Cement may also see price increases. Banking, Financial Services and Insurance sector growth will be slow. The IT sector is expected to remain weak. The second quarter will likely be uneventful for the IT sector. It is a brand new week. Of course, the markets are waiting for clarity on what happens to the tariff with respect to the India-US deal and along with that the earning season will also be in full throttle this particular week. How are you sensing the markets right now? Which factors are at play because of late, we are seeing a bit of a weakness on the index front? Nischal Maheshwari: Yes, these are the two big factors which are going to play out. There has been some amount of haziness as far as the tariffs are concerned. Most of us were expecting something to come in the last week, but not much news on that front. But I am pretty hopeful given that around more than 15 countries have already received a letter and India is not one of them. So, definitely there is something on the cards and that is a positive for the market. But I am really worried about the earnings in the coming quarter. Most of the analysts and my estimate is also 3-4% growth as far as earnings are concerned. For the full year also, we are looking at around 8-9%. The second half of the year is going to be much better. That is a worry and that is why we are seeing some profit taking happening in the market. Are you seeing any sectors emerging as winners in the trading setup that we have seen over the last week because we have seen sectoral churn. Last week, it was all about FMCG, but that was also on the back of news flow and some heavy lifting done by only a couple of stocks. Where do you believe we could see some rays of hope in the market? Nischal Maheshwari: There are a couple of sectors where we are going to see some volume improvements. FMCG is one of them and this may be the turning point for FMCG as far as volumes are concerned. I am not very sure about whether it is going to be followed up with the pricing also. Definitely volumes are going to be better and going ahead also I continue to believe there is going to be better volume growth as far as FMCG is concerned. Cement is another sector where the volumes were pretty good last quarter and now this quarter again, we are going to see both volumes as well as pricing improvement happening. These are the two sectors where I see some improvement and a positive outlook in the current quarter. BFSI, which is the large sector, is going to remain muted. We have seen credit growth around 9-9.5% and that is not going to be very significant for this quarter as far as BFSI, IT, or energy is concerned. Live Events You Might Also Like: Where to park money and where to create wealth now? Jyotivardhan Jaipuria answers What is your take on the IT pack given the disappointing numbers from TCS. The stock performance on Friday reflected that. How do you believe the IT numbers for the largecap IT names could look like for this earning season? Nischal Maheshwari: It would be something similar to what TCS has done minus 1-2, maybe whatever plus one as far as the largecap companies are concerned. But within the IT space, we have to look for the midcaps. There you might still look at a 10-12% growth. So, mid- teens growth can still happen with some of the midcap companies . But overall, it is going to be under pressure. We have still not seen demand coming back strongly in the US and till this tariff issue gets out of the way. I do not think there is going to be a fresh commitment of any capex across the world. We have to wait for a couple of more quarters or at least for one more quarter before we are going to start seeing some demand coming back. So, the second quarter also is going to be a wash-out for IT. What is your take on the whole chemical pack? BASF earnings show a decline in the top line of 2.1% in their Q2 2025 earnings and not just that, there is a guidance cut as well as the company is saying that the EBITDA before special item is expected between 7.3 billion to 7.7 billion versus the guidance that the company has given earlier. How do you see this impacting the chemical space and some of the Indian players as well? Nischal Maheshwari: As you have said, it is a very large company and they are spread across various subsectors within the chemical industry. It will not be right to say that BASF will put out a margin guidance, then there is a pressure across the whole spectrum. There would be certain parts of the chemical sector, basically the specialty part which continues to do well. In domestic parlance, agrochemicals seem to be on a very good wicket because of a good monsoon that we are seeing right now and the demand remains to be very good. But if I look at the whole chemical sector, two things are coming out very clearly. One is China-led pressure on the pricing front has now more or less diluted because the inventories which were there in China have totally got absorbed in the market in the last two quarters or three quarters. Now that dumping is not there and we have started seeing volumes pick up across most sectors as far as chemicals are concerned. So, these are the two guiding things which I see as positive. Yes, margins in certain sectors may be under pressure because demand has still not come back to the pre-COVID levels, but I see a positive outlook as far as the chemical sector is concerned. You Might Also Like: Betting on 5 platform, QSR and discretionary stocks: Karan Taurani
Time of India
2 days ago
- Business
- Time of India
Negatives mostly priced in for tier 1 IT companies; correction likely in midcaps: Sunny Agrawal
Sunny Agrawal , Head of Fundamental Equity Research, SBI Cap Securities , says The IT sector faces a weak demand environment as clients seek productivity gains through Gen-AI while expecting cost benefits. While tier I IT company negatives are priced in, midcap IT firms face potential correction due to expensive valuations. KPIT Tech is expected to deliver muted growth commentary for FY26 amid global automobile industry uncertainties. What is your take on the IT pack? The market has digested TCS earnings and given that the company is not that bullish on the growth outlook and are anticipating some pressure on discretionary spending, we have already seen very tepid moves coming in the other IT majors as well. But within the lot, KPIT Tech is holding on to the gains of 2% right now. How do you analyse the overall IT space and any stock that you would like to bet on in this correction? Sunny Agrawal: The way the commentary of TCS and Tata Elxsi has played out, it clearly seems there is a lot of uncertainty in terms of demand environment and at the same time, clients want to increase productivity using various Gen-AI tools and at the same time they want the benefit to be passed on to him or her. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Play War Thunder now for free War Thunder Play Now Undo So, overall, a pretty weak demand environment as far as the IT sector is concerned. Coming to a stock specific action or price action, most of the negatives are already in the price at least for tier I IT companies – be it TCS, Infosys or HCL Tech . The issue is with the midcap IT companies. The valuations are very expensive there compared to their largecap peers. In case the demand environment or the commentary is on weaker front from midcap companies, we see a sharp correction in the midcap IT pack. Moving on to the KPIT, the company during the mid-quarter update has already alerted the street that the deal execution is not playing out as per expectation and the deal wins are likely to slow down. Thus the negative news is already priced in for KPIT Tech and any positive development on the automobile side can act as a positive. Live Events You Might Also Like: Where to park money and where to create wealth now? Jyotivardhan Jaipuria answers But given the trade uncertainty going on in the global automobile industry, the transition from ICE engine to electric or for that matter hybrid, the dynamics of the industry are changing very rapidly. We expect KPIT to deliver a very muted set of commentary as far as growth for FY26 is concerned. So, let us wait and see what is the commentary of management on KPIT. You Might Also Like: Market very delicately poised; any bad news and we run the risk of downside: Aashish Somaiyaa TCS management on use-case based approach to AI; identifies 4 areas of focus
Economic Times
2 days ago
- Business
- Economic Times
Negatives mostly priced in for tier 1 IT companies; correction likely in midcaps: Sunny Agrawal
Live Events You Might Also Like: Where to park money and where to create wealth now? Jyotivardhan Jaipuria answers (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel , Head of Fundamental Equity Research,, says The IT sector faces a weak demand environment as clients seek productivity gains through Gen-AI while expecting cost benefits. While tier I IT company negatives are priced in, midcap IT firms face potential correction due to expensive valuations. KPIT Tech is expected to deliver muted growth commentary for FY26 amid global automobile industry way the commentary of TCS and Tata Elxsi has played out, it clearly seems there is a lot of uncertainty in terms of demand environment and at the same time, clients want to increase productivity using various Gen-AI tools and at the same time they want the benefit to be passed on to him or overall, a pretty weak demand environment as far as the IT sector is concerned. Coming to a stock specific action or price action, most of the negatives are already in the price at least for tier I IT companies – be it TCS, Infosys or HCL Tech The issue is with the midcap IT companies. The valuations are very expensive there compared to their largecap peers. In case the demand environment or the commentary is on weaker front from midcap companies, we see a sharp correction in the midcap IT on to the KPIT, the company during the mid-quarter update has already alerted the street that the deal execution is not playing out as per expectation and the deal wins are likely to slow down. Thus the negative news is already priced in for KPIT Tech and any positive development on the automobile side can act as a given the trade uncertainty going on in the global automobile industry, the transition from ICE engine to electric or for that matter hybrid, the dynamics of the industry are changing very rapidly. We expect KPIT to deliver a very muted set of commentary as far as growth for FY26 is concerned. So, let us wait and see what is the commentary of management on KPIT.
Mint
23-06-2025
- Business
- Mint
‘Prolonged war in the Middle East less likely than a peace deal'
The US involvement in Iran could queer the pitch for financial markets only if Iran or its proxies decide to escalate by targeting US bases or choking the Strait of Hormuz. That's something markets will be closely watching over the next few days as it could impact energy prices, with a fifth of global demand of 100 million barrels per day passing through the waterway. However, given the current global supply-demand dynamic, crude might not sustain at higher levels for too long, a plus for energy-dependent markets like India, believes Jyotivardhan Jaipuria, founder and MD of Valentis Advisors. The US has joined Israel's war on Iran. What does this bode for financial markets, including in India? With the US joining the war on Iran as we speak, focus on the markets will shift to events in the Middle East over the next few days. There are two possibilities which could play out now. First is the positive scenario where, post the US strikes, peace efforts move quickly, and this marks the beginning of the end of this phase of the war. The negative scenario is if Iran responds by hitting some US targets, which leads to a more prolonged war, especially if other countries get involved. Read more: Is the Israel-Iran war a billion-dollar threat to Adani Ports & SEZ? Currently, we think the second scenario is a lower probability, but something we have to keep a close watch on. Having said that, history shows that the impact of wars on stock markets is not long-lasting, and markets tend to bounce back quickly. The reason there is concern about the Middle East crisis is the price of oil, especially if energy infrastructure is hit in the war or more importantly, if the movement of vessels across the Strait of Hormuz is impacted. However, if we look at the current demand-supply balance, it is unlikely that oil can be sustained at high prices for very long. Hence, any surge in oil prices may impact markets in the short term, but investors should use that as a buying opportunity. The market has recovered from the low of 21,743.65 on 7 April to around 25,000 now. But we have since been stuck in a narrow range, unable to decisively cross the 25,200 levels. The reason? We have seen a sharp rally of around 12% from the lows in early April to mid-May. After such a sharp rally, it is normal and indeed healthy for the market to consolidate and absorb the gains we have seen. We also have to remember that the Iran-Israel conflict is also weighing on the markets. The 90-day pause by US President Donald Trump on tariffs will expire on 9 July, and there is uncertainty on whether he will extend the pause. In this environment, a time correction would help bring valuations to better levels. Analysts' expectations of earnings tend to be aggressive. Some expect Nifty EPS growth to double to 12% in the current fiscal year from that in FY25. What is your view? We also expect earnings to recover from the 5% earnings growth we saw in FY25 to low double-digit levels. A low base will help year-on-year (y-o-y) earnings growth, especially since the government capex in FY25 was very slow in the first eight months of the year. We see three factors driving the improvement. Firstly, rural demand should pick up as better monsoons lead to a better agricultural season. Secondly, urban demand should be better with the impact of the ₹1 trillion income tax rate cut helping boost consumer income. Lastly, the easy monetary policy and cut in interest rates will help both investment and consumer demand. The Reserve Bank of India (RBI) has made a series of policy decisions addressing the cost of funds and liquidity. Will this, in particular, increase consumption and help stocks? The RBI action is very positive, both for the economy as well as earnings. It is not just consumption but also investment demand that gets stimulated with easy liquidity and lower interest rates. The return ratios on projects as well as the profitability of companies change with lower interest rates. Easy availability of credit due to loose monetary policy also helps stimulate investments. Consumption demand is apparent with lower rates helping lower EMI for consumers. What's your approach to negotiating current markets? Which bucket (large-, small- or mid-) do you believe has the potential for the highest return and why? Our view is that investors should start moderating their return expectations relative to the return over the past few years post-covid. We would be looking at low double-digit returns in the market over the next few years. Read more: Municipal bodies still shun public bond issues. There's a lot that's holding them back At the beginning of 2025, we were in favour of large-caps over small- and mid-caps. With the correction in the small and mid-cap space, we are now neutral between these asset classes. The earnings growth in small and mid-caps will be stronger, which will probably compensate for the slightly higher valuations in the small and mid-cap space. How is sentiment among foreign portfolio investors (FPIs), whose flows can move the needle, toward India among the emerging markets (EM) pack? They were substantial sellers from October to March this year. That changed in the following two months. Will it sustain? There is general acceptance that within the emerging market space, India stands out as a strong economy with domestic demand. However, the general concern around India has been high valuations, both on an absolute and relative basis. In the middle of last year, India traded at a PE premium of close to 100% relative to the EM valuations. This was leading to selling by FPIs, especially after the stimulus by China in September 2024. After the underperformance of India, relative valuations became better at a 65% PE premium, closer to long-term averages, which has led to FPIs again increasing their weight on India. On an absolute basis, a decision by MSCI to move Korea to developed market status (meeting on 24 June) could help FPI flows to India and other emerging markets. This year, we have seen around ₹65,000 crore worth of block deals in which promoters /PEs offloaded stakes. Does this worry you, and if not, why? Selling by PE funds is natural as they need to return money to investors. At the same time, we are also seeing additional investments by PE funds. When you look at the selling as a percentage of India's market capitalisation, it is not very large. Having said that, we think this selling is an indicator that there is a general worry that valuations in the market are not cheap. Heavy selling by PE funds and promoters would also mean that funds to the secondary market go down. How does the initial public offering (IPO)appetite look to you at this point? Will you actively invest through new offers? It is good to have a buoyant IPO market since that helps investment demand and the economy. However, there was excessive euphoria in the IPO market last year with huge subscriptions. That euphoria has cooled, given the correction in the markets. However, liquidity in the market continues to be strong, and there is enough money for good-quality companies. In general, we find most IPOs coming at valuations that are more expensive relative to similar listed companies. Read more: When diversification backfires: Four Indian companies walking a fine line Are you bullish and bearish on any sectors, and why? We like the financial space, where valuations are still attractive. Select banks and NBFCs with a greater proportion of fixed-rate loan books will benefit from falling interest rates and look attractive. We also like the cement space, where consolidation in the sector should help pricing power over the next couple of years. We are also nibbling some chemical names, where earnings will see a rebound, and stocks have underperformed quite a bit.
Time of India
16-06-2025
- Business
- Time of India
Good news getting priced in faster, narrow range consolidation likely in medium term: Siddharth Vora
Live Events You Might Also Like: Rs 13 lakh crore boom, but Q4 sends a wake-up call to smallcap investors You Might Also Like: Jyotivardhan Jaipuria on where to put money on the table and where to take it off (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel , Executive Director,, says after a sharp three-month rally, the Indian market may experience profit booking or consolidation due to priced-in good news and limited valuation headroom. While cautious in the near term, medium-term prospects remain healthy with favorable market conditions. IT and metals sectors are performing well, and capital markets offer long-term growth right perspective to look at the market is that there are multiple positives from the macro front whether it is rate cuts, inflation, strong growth, we need to look at it from the perspective that we are coming out of a sharp rally over the last three months. So, in my opinion, a lot of good news is already priced in and one needs to be a little cautious from here on given we do not have too much valuation headroom in India were always an expensive market. We corrected a bit and now we are back to an expensive market. So, all the good news is actually known by everyone, bulk of it is also priced in. In the near term, we could see some sort of profit booking or consolidation coming out of the strong rally and the lack of fresh upside triggers in the near in the near term, we could see a marginally corrective market , but again that is a very short-term view. From a medium-term, we do believe that quantitatively we are in very healthy, favourable, and stable market conditions. All other sentiment indicators have been positive. We flagged off a market recovery outlook early like first week March, last week Feb, and that has played out really thought it would play out over 6-12 months, but it has played out over two-three months itself. So, yes, the good news is getting priced in faster and that is a good sign from the market, could see some narrow range consolidation in the medium term.: From an IT perspective, even in my last chat with you, I had said that it is a tail risk play in our portfolio. We have had a 12-13% allocation for the last two-three months, despite all the globally negative cues, US risks, we still had IT because of its free cash generating nature and comfortable valuations on the largecap side, traditionally giving a low volatility defensive exposure to the a volatility, quality, and valuation perspective, IT was fitting right in the quant strategy and therefore we have maintained our allocation and it is doing really well now. Where the rest of the market is seeing some sort of profit booking and correction, it is playing out the tail risk play, global play. So, both IT and metals are playing out well for us. They were contra positions at some point, but now they are turning favourable in the current markets to alcohol, we have only had one name in our portfolio for the last five-six months now – Radico. It has done really well for us so far and despite everything, we continue to maintain a 2-2.5% allocation to Radico and we will stick to our position till we see any major development from a quantitative perspective. Fundamental triggers can keep changing, but quantitatively from a factor standpoint, Radico continues to hold strong across multiple factors.: In our portfolio, we have a significant allocation to the entire capital markets play. It has contributed to our alpha for the month of May and June as well so far across the board right whether it is asset management companies, broking companies, some other platform companies, exchanges, or other capital market ancillaries, most of them have done well and we continue to hold this our financial allocation, it is lenders, capital markets, and insurance, these are the three broad pockets we have allocated and within this capital markets holds the relatively higher allocation and from a quantitative perspective, we believe we are well positioned to ride the wave in capital markets. It is a structural story, but we are not structural participants. We will stay in the story till quantitative triggers stay intact. The moment that changes, we will be out of the story.I can give you a fundamental view that for three-five years, this is a great area with visible growth, valuations are rich, cash generation is very good, but I know for a fact that if the market structure were to change, if there was excessive volatility, we would be the first ones to be out of the sector as right perspective to look at the market is that there are multiple positives from the macro front whether it is rate cuts, inflation, strong growth, we need to look at it from the perspective that we are coming out of a sharp rally over the last three months. So, in my opinion, a lot of good news is already priced in and one needs to be a little cautious from here on given we do not have too much valuation headroom in India were always an expensive market. We corrected a bit and now we are back to an expensive market. So, all the good news is actually known by everyone, bulk of it is also priced in. In the near term, we could see some sort of profit booking or consolidation coming out of the strong rally and the lack of fresh upside triggers in the near in the near term, we could see a marginally corrective market, but again that is a very short-term view. From a medium-term, we do believe that quantitatively we are in very healthy, favourable, and stable market conditions. All other sentiment indicators have been positive. We flagged off a market recovery outlook early like first week March, last week Feb, and that has played out really thought it would play out over 6-12 months, but it has played out over two-three months itself. So, yes, the good news is getting priced in faster and that is a good sign from the market, could see some narrow range consolidation in the medium IT and metals are playing out well for us. They were contra positions at some point, but now they are turning favourable in the current markets a fundamental view, for three-five years, capital market play is a great area with visible growth, valuations are rich, cash generation is very good, but I know for a fact that if the market structure were to change, if there was excessive volatility, we would be the first ones to be out of the sector as well.
