Latest news with #NitinBhasin

Economic Times
11-07-2025
- Business
- Economic Times
IT sector set for 2H25 comeback backed by low base, global tailwinds: Ambit Capital
After a muted first half, India's IT sector may be gearing up for a meaningful revival in the latter half of 2025. In this edition of ETMarkets Smart Talk, Nitin Bhasin, Head of Institutional Equities at Ambit Capital, along with Bharat Arora, shares why the sector is entering a favourable zone—driven by seasonality, an uptick in global tech demand, and contrarian signals like low index weight and weak CEO confidence. The duo also offers a detailed playbook for navigating FY26's volatile and concentrated market, including preferred sectors, fixed income strategy, and the rising importance of quality and low-volatility stocks in a stock-picker's market. Edited Excerpts - ADVERTISEMENT Q) Thanks for taking the time out. Nifty closed with marginal gains in June, but for the first six months of 2025, it is up over 7%. How do you see markets for the rest of FY26? Any big events to watch out for?A) We are in the phase of rise in stock market concentration, wherein market returns are muted, and large-caps outperform mid-caps and small-caps. This has been the case in CY25TD wherein large-caps (8%) have outperformed mid-caps (4%) and small-caps (relatively flat), and we expect this to worsen going forward. Time to be selective as FY26 is expected to be a stock-picker's market & we expect this trend to continue in FY27 as the next few months, we believe a key monitorable will be trailing market returns. Historically, moderation in returns has led to moderation in DMF equity flows, which have already halved since Dec-24. ADVERTISEMENT Even if markets remain at current levels, TTM returns of Nifty as well as top mid-cap & small-cap schemes are likely to remain muted/negative as base hardens, which can further exacerbate correction.Q) How are you managing the volatility in your portfolio? Any key learnings which you would like to share from 1H2025? A) Defensive sectors such as FMCG, Pharma and IT are the biggest OWs in our model portfolio, due outperformance in periods of rising market concentration. ADVERTISEMENT Historically, FMCG & Pharma have exhibited lower volatility in returns as compared to other 1HCY25, market breadth remained narrow with median stock (-0.5%) lagging the NSE500 index (5.5%) by ~6%. We expect this to continue going forward and expect CY25 to be stock-picker's market. ADVERTISEMENT Headline earnings growth is slowing down, with Nifty FY25 earnings at ~7%, while FY26E estimate stands at ~7%, the lowest in recent times. In such an environment, Quality and Low Volatility factors outperform, which has been the case over the past year. Q) One of the reports suggested that India Inc.'s profits have grown nearly 3x faster than GDP since FY20. What structural factors are driving this divergence? A) Since the pandemic, India Inc. has focused on balance-sheet deleveraging instead of capex investments, which led to lower interest costs. ADVERTISEMENT As a result, profit margins and return ratios have significantly improved, which has led to 21% CAGR growth in BSE500 PAT over the last 5-years as compared to ~8% CAGR GDP other structural factor driving this has been shift in market share from unorganized to organized players across businesses have gained scale, pricing power, and profitability as informal competitors exited or struggled to growth in employee cost has declined from 9% in June-20 to 5% in Mar'25, which has also been a trigger for high profit growth. Q) With the China+1 theme gaining traction, which Indian sectors are best placed to attract global capital and scale? A) India has struggled to capitalize fully on the 'China +1 strategy' with NITI Ayog, the government's think tank admitting limited gains so far. Electronics has seen the biggest gains with Apple's plans for continued expansion in India (despite Trump's threats) highlighting the country's growing foothold in the global electronic supply chain. This has also benefited Indian EMS players which have seen a lot of traction from both import substitution and exports. As China vacates lower value-added manufacturing, textiles, toys, engineering goods, and pharma stand to gain. Q) How is fixed income as an asset class looking for long-term investment? How much money should one allocate as a hedge to combat volatility? A) Our GRIP framework (Growth, Risk premium, Inflation and Positioning) suggests a weak outlook for equities and asset allocation in favor of earnings growth slowing down (FY26E estimate is one of the lowest starting earnings growth estimates in recent times) and valuations remaining elevated, we do not expect significant outperformance of equities over risk premium is increasing due to growth slowdown, whereas reduction in inflation makes bonds more the long-term, favourable macroeconomic conditions and structural drivers like resilient domestic demand, fiscal consolidation, and global bond index inclusion should support the bond market. Should global uncertainties and geopolitical tensions abate, benign/stable inflation and lower interest rates would remain positive Nifty has considerably outperformed bonds over the last decade. While market returns can be volatile in the short-term, equities remain the best-performing asset class over a longer horizon. Q) Which sectors are likely to remain in the spotlight in 2H2025? A) IT exhibits strong seasonality wherein bulk of returns (~17% median) are generated in 2nd half of the year (2HCY1HCY). There has been marginal improvement in S&P500 CY25E revenue growth, which exhibits a strong correlation with tier-1 IT revenue triggers such as exposure to the Quality factor (outperforms in an earnings growth slowdown environment) & IT index weight at a 16-year low, should lead to IT outperformance in CEO confidence index is at one of the lowest level, which is a strong contrarian indicator for IT outperformance. Q) Can we say that we are in a "stock picker's market" ahead? If yes, what are the key traits investors should look for in FY26 picks? A) Yes, we are in a stock picker's market. Earnings growth seems to be the key. Stocks with moderate by predictable earnings growth should be preferred over high growth stocks with risk to earnings a factor perspective, we prefer Quality and Low volatility stocks which have historically outperformed in an earnings growth slowdown India's structural story remains intact, we are in a cyclical slowdown at the mid-cycle. Historically, Nifty's earnings estimate trajectory used to be revised downwards each year (~8%) leading up to the financial year but earnings cuts were minimal in this cycle, which have now government is deploying counter-cyclical tools like repo-rate cuts, CRR cuts, tax relief, and fiscal spending to revive demand and boost growth. Q) Gold has also seen a tremendous run in 2025 – how do you see the yellow metal shining in 2H2025? Time to book profits or add on dips? A) Elevated geo-political uncertainty led to significant rise in gold prices over the past few quarters. However, we believe that within commodities, its silver's time to Silver/Gold ratio currently trades at -1 S.D below its LTA (7-year) and we expect mean reversion to manifest & gold to underperform silver in the near-to-median industrial demand (accounts for ~50% of total silver use) is surging. Green energy policies globally are amplifying silver's role as a key industrial the supply side, mine output remains constrained due to high operational costs and lower ore grades. This supply-demand mismatch can further accelerate silver's outperformance in the near-to-medium from a tactical perspective, the commodity exhibits a strong seasonality in returns with July historically being the best-performing month. Q) How should one play the small & midcap theme? Has the profitability improved compared to large caps? What does the data suggest? A) SMID profit contribution to the NSE500 universe significantly accelerated since the pandemic but peaked in March-23 at 28%. However, Mcap contribution has remained elevated at ~33% (ATH), while PAT contribution currently stands at 26%. Despite the recent correction, mid-caps and small-caps continue to trade at a significant premium to large-caps as well as their respective 7-year average multiples. Moreover, EPS estimates trajectory appears better in large-caps vs SMIDs. Heavyweight sectors in SMID such as Capital Goods and Chemicals have witnessed significant FY26E earning downgrades in CY25TD. With expensive valuations and deteriorating earnings growth, divergence appears unsustainable. We continue to prefer large-caps over SMIDs, and within large-caps prefer don't expect SMID valuation premium to sustain as the built-in growth rate is too high. However, India remains one of the fastest growing economies & over the long-term is likely to outperform EM peers. Q) Any sector that is running out of steam and investors should carefully pare their positions. A) We had been considerably OW on Banks for a long-time, but turned UW last month. Until 4QFY25, BFSI had been the primary driver of Nifty as well as NSE500 earnings growth since Jun' the trajectory appears to have changed & is expected to continue in FY26E. Large-cap Banks median PAT growth stands at-4% for least 2 of 3 key variables, loan growth, NIMs & asset quality, are less optimistic for FY26E, with pressure on NIMs evident. Banks with higher share of fixed-rate/MCLR loan portfolio will benefit and only ICICI/HDFC Bank stand out. From a tactical perspective, Bank Nifty/Nifty ratio touched +2 S.D in June'25, a level from which Banks have historically underperformed the markets in most instances over the following 6-12 months. (Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)


Time of India
11-07-2025
- Business
- Time of India
IT sector set for 2H25 comeback backed by low base, global tailwinds: Ambit Capital
Live Events (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel After a muted first half, India's IT sector may be gearing up for a meaningful revival in the latter half of this edition of ETMarkets Smart Talk, Nitin Bhasin, Head of Institutional Equities at Ambit Capital , along with Bharat Arora, shares why the sector is entering a favourable zone—driven by seasonality, an uptick in global tech demand, and contrarian signals like low index weight and weak CEO duo also offers a detailed playbook for navigating FY26's volatile and concentrated market, including preferred sectors, fixed income strategy, and the rising importance of quality and low-volatility stocks in a stock-picker's market. Edited Excerpts -A) We are in the phase of rise in stock market concentration, wherein market returns are muted, and large-caps outperform mid-caps and has been the case in CY25TD wherein large-caps (8%) have outperformed mid-caps (4%) and small-caps (relatively flat), and we expect this to worsen going to be selective as FY26 is expected to be a stock-picker's market & we expect this trend to continue in FY27 as the next few months, we believe a key monitorable will be trailing market returns. Historically, moderation in returns has led to moderation in DMF equity flows, which have already halved since if markets remain at current levels, TTM returns of Nifty as well as top mid-cap & small-cap schemes are likely to remain muted/negative as base hardens, which can further exacerbate correction.A) Defensive sectors such as FMCG , Pharma and IT are the biggest OWs in our model portfolio, due outperformance in periods of rising market FMCG & Pharma have exhibited lower volatility in returns as compared to other 1HCY25, market breadth remained narrow with median stock (-0.5%) lagging the NSE500 index (5.5%) by ~6%. We expect this to continue going forward and expect CY25 to be stock-picker's earnings growth is slowing down, with Nifty FY25 earnings at ~7%, while FY26E estimate stands at ~7%, the lowest in recent times. In such an environment, Quality and Low Volatility factors outperform, which has been the case over the past year.A) Since the pandemic, India Inc. has focused on balance-sheet deleveraging instead of capex investments, which led to lower interest a result, profit margins and return ratios have significantly improved, which has led to 21% CAGR growth in BSE500 PAT over the last 5-years as compared to ~8% CAGR GDP other structural factor driving this has been shift in market share from unorganized to organized players across businesses have gained scale, pricing power, and profitability as informal competitors exited or struggled to growth in employee cost has declined from 9% in June-20 to 5% in Mar'25, which has also been a trigger for high profit growth.A) India has struggled to capitalize fully on the 'China +1 strategy' with NITI Ayog, the government's think tank admitting limited gains so has seen the biggest gains with Apple's plans for continued expansion in India (despite Trump 's threats) highlighting the country's growing foothold in the global electronic supply has also benefited Indian EMS players which have seen a lot of traction from both import substitution and exports. As China vacates lower value-added manufacturing, textiles, toys, engineering goods, and pharma stand to gain.A) Our GRIP framework (Growth, Risk premium, Inflation and Positioning) suggests a weak outlook for equities and asset allocation in favor of earnings growth slowing down (FY26E estimate is one of the lowest starting earnings growth estimates in recent times) and valuations remaining elevated, we do not expect significant outperformance of equities over risk premium is increasing due to growth slowdown, whereas reduction in inflation makes bonds more the long-term, favourable macroeconomic conditions and structural drivers like resilient domestic demand, fiscal consolidation, and global bond index inclusion should support the bond market. Should global uncertainties and geopolitical tensions abate, benign/stable inflation and lower interest rates would remain positive Nifty has considerably outperformed bonds over the last decade. While market returns can be volatile in the short-term, equities remain the best-performing asset class over a longer horizon.A) IT exhibits strong seasonality wherein bulk of returns (~17% median) are generated in 2nd half of the year (2HCY>1HCY). There has been marginal improvement in S&P500 CY25E revenue growth, which exhibits a strong correlation with tier-1 IT revenue triggers such as exposure to the Quality factor (outperforms in an earnings growth slowdown environment) & IT index weight at a 16-year low, should lead to IT outperformance in CEO confidence index is at one of the lowest level, which is a strong contrarian indicator for IT outperformance.A) Yes, we are in a stock picker's market. Earnings growth seems to be the key. Stocks with moderate by predictable earnings growth should be preferred over high growth stocks with risk to earnings a factor perspective, we prefer Quality and Low volatility stocks which have historically outperformed in an earnings growth slowdown India's structural story remains intact, we are in a cyclical slowdown at the mid-cycle. Historically, Nifty's earnings estimate trajectory used to be revised downwards each year (~8%) leading up to the financial year but earnings cuts were minimal in this cycle, which have now government is deploying counter-cyclical tools like repo-rate cuts, CRR cuts, tax relief, and fiscal spending to revive demand and boost growth.A) Elevated geo-political uncertainty led to significant rise in gold prices over the past few quarters. However, we believe that within commodities, its silver's time to Silver/Gold ratio currently trades at -1 S.D below its LTA (7-year) and we expect mean reversion to manifest & gold to underperform silver in the near-to-median industrial demand (accounts for ~50% of total silver use) is surging. Green energy policies globally are amplifying silver's role as a key industrial the supply side, mine output remains constrained due to high operational costs and lower ore grades. This supply-demand mismatch can further accelerate silver's outperformance in the near-to-medium from a tactical perspective, the commodity exhibits a strong seasonality in returns with July historically being the best-performing month.A) SMID profit contribution to the NSE500 universe significantly accelerated since the pandemic but peaked in March-23 at 28%.However, Mcap contribution has remained elevated at ~33% (ATH), while PAT contribution currently stands at 26%. Despite the recent correction, mid-caps and small-caps continue to trade at a significant premium to large-caps as well as their respective 7-year average EPS estimates trajectory appears better in large-caps vs SMIDs. Heavyweight sectors in SMID such as Capital Goods and Chemicals have witnessed significant FY26E earning downgrades in expensive valuations and deteriorating earnings growth, divergence appears unsustainable. We continue to prefer large-caps over SMIDs, and within large-caps prefer don't expect SMID valuation premium to sustain as the built-in growth rate is too high. However, India remains one of the fastest growing economies & over the long-term is likely to outperform EM peers.A) We had been considerably OW on Banks for a long-time, but turned UW last month. Until 4QFY25, BFSI had been the primary driver of Nifty as well as NSE500 earnings growth since Jun' the trajectory appears to have changed & is expected to continue in FY26E. Large-cap Banks median PAT growth stands at-4% for least 2 of 3 key variables, loan growth, NIMs & asset quality, are less optimistic for FY26E, with pressure on NIMs evident. Banks with higher share of fixed-rate/MCLR loan portfolio will benefit and only ICICI/HDFC Bank stand a tactical perspective, Bank Nifty/Nifty ratio touched +2 S.D in June'25, a level from which Banks have historically underperformed the markets in most instances over the following 6-12 months.(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)


Economic Times
08-07-2025
- Business
- Economic Times
FMCG could see earnings upgrade, but valuation still a concern: Nitin Bhasin
"If one were to go into such mechanical ways of valuation, it would be very difficult to one to say that where will we make money, but as again I go back to that, these are core holdings, these are defensive stocks, FMCG, and people are perhaps owning them for a shorter periods of time overweight or underweight," says Nitin Bhasin, Ambit. ADVERTISEMENT But within the FMCG basket any stock that you can talk to us about given that we already have your top buys and top sells. So, anything that is looking interesting to you and with respect to the valuations as well, are they comforting at this point in time because they have not done anything for the past couple of years if we see? Nitin Bhasin: You are right FMCG as a sector valuations have remained rich, but remember in our country lot of valuations are a function of flows also, I will keep on going back to that, and the mutual funds, the institutional investors, they continue to own these names because these are considered to be quality companies. A few names that we like maybe more like the Indian domestic companies like GCPL we would like them but not going into a specific stock discussion please. I was also looking at some of your other top sells. Highlight for us, where is it that you do not see any valuation comfort now and you think valuations are at their peak and it makes sense to actually book profits if not completely exit? Nitin Bhasin: I would say when you look at the sectors again within the IT where we like it as a space, there could be some of the midcap IT companies which are perhaps very priced for the quality of the business, there is something like a Coforge could be one, something like Persistent could be another one where we think that these are really-really priced. At the same point in time there could be stocks like DMart in the consumption space where we find them very-very priced, would remain away from such names. And at the same point in time, I would say even consumer durable companies like Voltas which appear to be very priced and perhaps stuck in a very-very highly competitive zone where they are unable to create value from the one business of consumer durables that they are in or in the projects business. Those are three or four names that stand out. But at the same point in time in the banks also we have highlighted before names such as Kotak, etc, are the ones. What we do not like is themes like I would say defence today which is like a talk of the town. There could be stocks such as Godrej Real Estate priced, again I would say so, though the real estate sector holds up really well. So, those are the five or six names which come to my mind as one of the key sell ideas that we would have from our basket today. ADVERTISEMENT I want to go back to FMCG again and this is my personal view which is that if you buy stocks which have 4.5% growth and sectors which are growing below the GDP and if PE multiples are 50, 60, how will you make money? Nitin Bhasin: Very interesting. If one were to go into such mechanical ways of valuation, it would be very difficult to one to say that where will we make money, but as again I go back to that, these are core holdings, these are defensive stocks, FMCG, and people are perhaps owning them for a shorter periods of time overweight or underweight. ADVERTISEMENT But again, let us go back on the similar principles that if you look at many of these defence companies also in India which are fairly very large, large expensive companies, they are trading at more than 50, 60, even EMS companies like Dixon which we have a sell on one would actually say that they can grow much faster but their valuations are perhaps in excess of 50 times, 60 times again. Perhaps it is the mood change is what the market is looking for. In the case of FMCG, the mood change for earnings growth trajectory, remember one is the valuations but the other is what is the earnings expectations and the market sometimes follows, but most of the time in the short term follows the earnings expectations trajectory and perhaps FMCG looks like one where the downgrades are behind us, I mean there is a possibility of some minor upgrades in the near term, let us see whether it builds up into a bigger trend. (You can now subscribe to our ETMarkets WhatsApp channel)


Time of India
08-07-2025
- Business
- Time of India
FMCG could see earnings upgrade, but valuation still a concern: Nitin Bhasin
"If one were to go into such mechanical ways of valuation, it would be very difficult to one to say that where will we make money, but as again I go back to that, these are core holdings, these are defensive stocks, FMCG, and people are perhaps owning them for a shorter periods of time overweight or underweight," says Nitin Bhasin , Ambit . But within the FMCG basket any stock that you can talk to us about given that we already have your top buys and top sells. So, anything that is looking interesting to you and with respect to the valuations as well, are they comforting at this point in time because they have not done anything for the past couple of years if we see? Nitin Bhasin: You are right FMCG as a sector valuations have remained rich, but remember in our country lot of valuations are a function of flows also, I will keep on going back to that, and the mutual funds, the institutional investors, they continue to own these names because these are considered to be quality companies. A few names that we like maybe more like the Indian domestic companies like GCPL we would like them but not going into a specific stock discussion please. I was also looking at some of your other top sells. Highlight for us, where is it that you do not see any valuation comfort now and you think valuations are at their peak and it makes sense to actually book profits if not completely exit? Nitin Bhasin: I would say when you look at the sectors again within the IT where we like it as a space, there could be some of the midcap IT companies which are perhaps very priced for the quality of the business, there is something like a Coforge could be one, something like Persistent could be another one where we think that these are really-really priced. At the same point in time there could be stocks like DMart in the consumption space where we find them very-very priced, would remain away from such names. And at the same point in time, I would say even consumer durable companies like Voltas which appear to be very priced and perhaps stuck in a very-very highly competitive zone where they are unable to create value from the one business of consumer durables that they are in or in the projects business. Live Events Those are three or four names that stand out. But at the same point in time in the banks also we have highlighted before names such as Kotak, etc, are the ones. What we do not like is themes like I would say defence today which is like a talk of the town. There could be stocks such as Godrej Real Estate priced, again I would say so, though the real estate sector holds up really well. So, those are the five or six names which come to my mind as one of the key sell ideas that we would have from our basket today. I want to go back to FMCG again and this is my personal view which is that if you buy stocks which have 4.5% growth and sectors which are growing below the GDP and if PE multiples are 50, 60, how will you make money? Nitin Bhasin: Very interesting. If one were to go into such mechanical ways of valuation, it would be very difficult to one to say that where will we make money, but as again I go back to that, these are core holdings, these are defensive stocks, FMCG, and people are perhaps owning them for a shorter periods of time overweight or underweight. But again, let us go back on the similar principles that if you look at many of these defence companies also in India which are fairly very large, large expensive companies, they are trading at more than 50, 60, even EMS companies like Dixon which we have a sell on one would actually say that they can grow much faster but their valuations are perhaps in excess of 50 times, 60 times again. Perhaps it is the mood change is what the market is looking for. In the case of FMCG, the mood change for earnings growth trajectory, remember one is the valuations but the other is what is the earnings expectations and the market sometimes follows, but most of the time in the short term follows the earnings expectations trajectory and perhaps FMCG looks like one where the downgrades are behind us, I mean there is a possibility of some minor upgrades in the near term, let us see whether it builds up into a bigger trend.


Time of India
08-07-2025
- Business
- Time of India
Largecaps offer safety as mid- and smallcap rallies look overstretched: Nitin Bhasin
"As of today, if I look at Nifty , the consensus estimates is more like 7-8% for FY26. Last quarter we have seen another perhaps 2.5-3% earnings downgrades primarily because of BFSI and some bit of healthcare. So, hence earnings are not giving the best visibility, but perhaps you could consider that as a contra signal also, some of the market players, that how low can it go but that is what I was meaning by when next one year earnings does not look like we are at a very exciting state of earning expectations," says Nitin Bhasin , Ambit. I guess the markets now have a continued wait and watch mode because the tariff deadlines have been shifted now to August 1st and we have not heard anything conclusive. While we understand that there is a mini trade deal which has already happened, but the big letter so to speak is still awaited. Nitin Bhasin: You are right, market is stuck where along with flows and along with the macro indicators, we are just trying to find new direction where to go, perhaps tariffs is one thing. India has become a reasonably valued place where most of the stocks appear to be reasonably valued. So, hence everybody is looking for direction from what happens on the tariffs, you are right, because Indian earnings which we can discuss, but Indian earnings are not holding up so because of which people are looking for the tariff event how it plays out for us. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Join new Free to Play WWII MMO War Thunder War Thunder Play Now Undo When you say Indian earnings are not holding up, are you talking about the earning season which we should anticipate and expect for the quarter gone by or are you talking about the things which have already transpired in the last in FY25? Nitin Bhasin: So, FY25 is behind us and as we entered into FY26, in my last 10-15 years of tracking the Indian markets, we have never seen that we have started a fiscal year with 9% to 10% earnings growth for the Nifty expected for the next one year. We Indians have or most of the sell side has the pension for estimating high amount of growth and then going through downgrades barring the period post COVID, but in FY26 we had earnings growth of 9% to 11%. As of today, if I look at Nifty, the consensus estimates is more like 7-8% for FY26. Last quarter we have seen another perhaps 2.5-3% earnings downgrades primarily because of BFSI and some bit of healthcare. So, hence earnings are not giving the best visibility, but perhaps you could consider that as a contra signal also, some of the market players, that how low can it go but that is what I was meaning by when next one year earnings does not look like we are at a very exciting state of earning expectations. Live Events So, if flows are strong, earnings are not great, and valuations are rich, what will happen to markets? Nitin Bhasin: We will be maintaining this that India has a very big fundamental playing in its favour, which has been flows, whether it was retail flows, the earlier about a year, year-and-a-half back or so foreign flows, and now the flows from the other DIIs beyond MFs which is the EPFO flows and you can see that the mutual fund flows have been following the low returns from the mutual funds and the mutual fund flows have come off, not have decelerated, but at the same point in time the DIIs flows mainly from, you could say, the non-mutual fund institutions has actually been holding up. So, flows have been driving the market, keeping the valuations punchy and we see from the bottom in the last three months market despite earnings bouncing especially back in smallcap and midcaps. So, I would say a market which remains pretty much volatile, a market which remains sideways, but a stock picker market. Market moves very fast in the pockets which have underperformed the recent past. So, hence, when we are highlighting to our institutional investors, what we are highlighting to them is to maintain or reduce their underweight positions in IT, that has been our call for the last month, month-and-a-half. Banks, we are expecting earnings estimates downgrades. Banks have done also very good in the last one year. So, it over banks was one of the calls. Stay in largecaps, stay Nifty, very well knowing that the last three months Nifty has not performed as good as what the smallcap or the midcap has performed. What do you make of the Q1 update so far, especially for the FMCG staples side as well as the banking side as well because for staples, have this surprised you in any way because the stock reactions were actually quite good and also on the banking like you just highlighted that you are expecting the earnings downgrade or rather cuts coming in, but what is your take on Kotak Mahindra Bank, the stock is up today and I believe that is one of your sell ideas. Nitin Bhasin: Yes, we have been sellers on Kotak for a while. I was speaking to the analyst and what stood out from Kotak results perhaps was the kind of specific credit categories in which they approached the growth, perhaps as a sector overall we are worried about that the deposit growth which has actually come up we are not getting a similar sort of a credit growth in the marketplace. Perhaps the pristine credit quality which most of the banks were seeking in the private sector is not available that much. Post COVID a very good amount of credit rush that came through. Good quality of credit are not borrowing that much anymore, perhaps either their incomes have moved up or they are all cash rich like most of the corporates in India sitting on a Rs 5 trillion cash. There is a demand for credit in the MSME, in the SME, or in the middle or the bottom of the pyramid. Are the banks geared for that, that is the key question. Some of the NBFCs may be doing good job over there, but the banks are finding themselves, the pristine quality credit of either private consumption or that matter corporate I would say. Coming back to your question on the FMCG, clearly yes, GCPL update, perhaps some signs around the real wage growth, some readings around the freight index in the long distance for trucks in India is showing that there could be a small let us say a blip or an improvement in activity in the fortunes or the activity at the rural or the agri based economy and given the food inflation which has come off perhaps that shows positive impact in the real wages also. So, looks good, FMCG and it in a market where flows are, as I mentioned in the beginning, the mutual fund flows are sort of decelerating, earning estimate outlooks especially from the banks are not looking that robust, people could be forming a view that it and FMCG, more defensive sectors, earnings are stable, no more cuts possible over there and hence the two sectors outperforming. it has been one of our recommendations, it could see no more cuts perhaps into this fiscal. So FMCG clearly something to watch out for, right now is this improvement, a beginning of a big trend, we have seen some false starts in the past, let us see how it builds up.