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Economic Times
2 days ago
- Business
- Economic Times
Anand Shah on why he remains positive on metal pack, manufacturing
Live Events You Might Also Like: Sectoral themes or bottom-up stories? Anand Shah explains the state of the market You Might Also Like: Mihir Vora on where to look for opportunities in the broader market (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel CIO- PMS & AIF Investments,says global ferrous metal profitability remains muted due to strong Chinese exports, pressuring steel company earnings worldwide. Despite this, there's optimism for margin recovery in select chemicals and metals sectors, driven by attractive valuations and potential earnings growth. While positive on manufacturing, particularly defense and railways, valuations are becoming less profitability in general, especially in the ferrous metals, is still fairly muted globally. We are seeing very strong exports coming out of China which is putting a lot of pressure not only on the profitability of the Chinese steel companies but even the profitability for steel companies globally is under pressure as Chinese demand remains muted. But the production and exports continue to remain whole premise on being overweight on select cyclical sectors is that we believe in pockets of chemicals and pockets of metals, we will see bottoming out of the margin sooner or later and that is when a little bit of pricing power will come back along with a little bit of margin growth along with reasonable topline growth. Valuations remain fairly attractive in these segments of the market relative to the overall market PE multiples. So, a combination of expected recovery in earnings and the reasonable valuations makes us more positive on this sector versus continue to be very bottom up in pharma because there are very different drivers of earnings and growth for each company. The outlook for US generics notwithstanding, the tariff related uncertainty remains little positive. We had a lot of pricing pressure which has eased and that continues to remain fairly favourable for the generic companies in absence of a tariff issue. So, we still remain on the sidelines. We are still watching out to see what is happening on the tariff front and how the US generics is playing out, which is a large component of profitability for most of the pharma have been positive on manufacturing for quite a while now. We saw the bottoming out of the manufacturing margins in 2019, 2020 phase and since then there has been a sharp recovery in profitability but more importantly, pockets of markets like defence and others have actually done extremely well and to that extent the valuations do not remain that attractive today in many of those within manufacturing and again across the market, you will have to be more bottom up. Broadly the market is fairly priced and to that extent, no outsized returns can be expected from the broader market and from here on, for both for creating alpha on the way up as well as protecting the capital in the event of a sharp correction in the market being more bottom up, being more focused on the earnings growth rate at a reasonable price and reasonable valuations are both very important. We continue to focus on those areas, identifying sectors and companies where earnings growth relative to the valuations are attractive of the very big themes for us has been consolidation versus fragmentation. In our bottom-up stock picking, it is very important to see which sectors or which segments of the market where the number of players are reducing. There is a consolidation and to that extent, the pricing power is moving back to the manufacturer or to the service provider and that is where I have spoken about airlines and telecom sector in general that context, the consumer space in general and paints in particular, have had a very high profitability for a very long period of time. We had a fairly stable competitive intensity where four players dominated that market. Since then, given that the valuations were reasonably high for this sector, and the market was ready to value them in greater multiples to their earnings, it has attracted a lot of have seen an influx of quite a few players in that segment of the market, particularly in paints over the last few years and that has brought down the growth not only for individual companies, but also the margins. We are watching that space and seeing if there is an end of competition and we will again start seeing consolidation and moving up. That should help the sector and the companies in those has been consolidating over the last 20 years and at region level it is further consolidated. Having said that, what we all like in the cement sector is that the profits are not very high. The margins relative to historically what they made is not significantly higher and to that extent we believe the cement has room for prices to move up or margins to move up given that the inflation has not been very high in that segment of the market for a very long period of in one pocket, southern India, the margins were far lower than the average and that is where we are again seeing some bit of uptick. Otherwise, across India, we expect consolidation should drive slowly and steadily the profitability to higher levels as demand picks up. Demand will be the key, spending on real estate, spending on housing, spending on infrastructure. Without that, we will not get sustainable improvement in pricing and profitability that changes month on month. The reason is that demand is not as strong as one would want for a sustainable growth and improvement in pricing and the margins for the sector.
Economic Times
04-07-2025
- Business
- Economic Times
Expect double-digit earnings growth from BSE 500 companies going ahead: Mukul Kochhar
Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads , Head of Institutional Equities,says despite global concerns, the Indian market exhibits underlying strength with expectations of double-digit earnings growth for BSE 500 in FY26 and FY27. Lower structural inflation supports valuations, coupled with responsible fiscal management leading to lower interest rates and high corporate profitability . The key challenge lies in securing trade treaties to integrate into global supply are some concerns, largely external, and I will first just talk about that. What has happened is because the Indian market on a relative basis has done very well, foreign investors have taken an opportunity to book gains. That was the story last year and we expect that story to continue for this year and maybe into the near future. What that has resulted in is that capital flows which used to provide a cushion to the currency of roughly $40 billion per year, turned neutral in to balance that, if capital flows are neutral, you have to have a neutral trade balance. That is just basic economics. In order to have a neutral trade balance, we need to be part of the global supply chains and have some sort of an understanding on trade with the large trade blocks, US, Europe, etc, which are underway and that is why there is so much focus of the market on what is going to happen on the US trade is very critical to get that right and that could be a near-term catalyst for the market. If we look beyond the external, which is the capital flows and the counter balancing trade equations, the market is actually pretty okay. We are expecting double-digit earnings growth for BSE 500 in FY26 and FY27. Remember that inflation structurally in India is down. Inflation is down from higher than 5% or close to 6% in the average of the last 5 to 10 years to now 3%.Despite this lower inflation, our earnings growth has kept up and it is in double digits, in which case valuations are well supported. So we have reasonable earnings growth and the valuations are well supported given lower inflation and lower interest rates. Structurally we are looking pretty good. I can talk about a few more points about this which is responsible fiscal management by the government and which is leading to lower interest rates and high corporate profitability which is positive for upcoming capex. There are multiple positives brewing for the market. The only concern is whether we are able to sign some sort of a reasonable trade treaty to be part of global supply cyclical is a theme we have been on for the last three-four years and that continues. It is now a more savings and investment-led economy. Those themes are largely domestic. In this environment, financials will do well. So, we are selectively positive on the banks. We have some picks in the largecap as well as the midcap space. We even like some PSU banks in this environment. Some NBFCs are attractive including lending and non- lending. On the non-lending side, some capital markets exposed companies, which are savings-related NBFCs, are very are reasonably comfortable with industrial names. The leading industrial companies look attractive right now. We believe that the auto sector has some reasonable picks. On the domestic cyclical side, we do not have trouble finding reasonably priced stocks with decent growth momentum. We have a little bit of a concern when I said the economy is going to be savings and investment led. Domestic consumption is going to suffer there. We are negative on consumer staples. We are also negative on Indian IT services largely because valuations are not supportive. If currency dynamics are not favourable, largecap IT is not going to deliver good are two kinds of capital flows on the equity side that come into the country. One is a foreign direct investment (FDI) which is long-term capital expenditure related flows. Those are actually fairly stable, and we get $75 to $80 billion a year and that continues, that has trended over the last six-seven years and that has short-term flows, which are the FII flows, vary depending on how attractive opportunities are in the market, which literally could turn every few months. In March, the market had become very attractive in terms of valuation and foreign flows were good for the next two-three months. Now, the market is up from those levels. There is 10-15% appreciation and people are taking some profits. That is very normal and nothing to worry the flow side, what has really changed in India in the last one-two years, is where on the capital flows, we need to think about the outgoing FDI investments. Outgoing FDI investment includes people having come in, made capex six-seven years ago, and now selling down and booking profits on those including Indian companies that are flushed with capital today and investing outside, has picked up on a structural basis and we need to think about it a little bit. But FII equity flows come and go and there's nothing to worry about there.
Economic Times
18-06-2025
- Business
- Economic Times
How should you place your bets as Nifty makes a U-turn from 25,000? Vinay Rajani answers
Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads , AVP,says the Indian stock market is currently experiencing a tug-of-war between bulls and bears, with Nifty facing strong resistance at 25,000. Despite a recent recovery, the market remains choppy with sector rotation. Concerns arise from a bearish engulfing pattern in Bank Nifty . Caution is advised unless Nifty closes above 25,000, while a break below 24,700 could trigger selling definitely a tug of war is going on between bulls and bears and a nice recovery was registered in the last three trading sessions. We have seen more than 500 points rise from the lower level, but somehow this 25,000 is a big hurdle and Nifty is not able to find its feet above that level; so that continues to remain a strong resistance. So, we are into choppiness is there and sector rotation is going on. It is doing well. Now banking has been performing weakly. We have seen in the past that IT and banking are having a negative correlation and the same is happening. I am a bit concerned about the Bank Nifty chart because last week we saw a bearish engulfing pattern on the weekly charts, and a bit of a cautious stance should be taken on the basis of yes, we cannot still say that we are out of woods or any geopolitical issue or any particular news can again drag the Nifty downside. So, unless we get a close of about 25,000 in Nifty, we should remain cautious on the market because now we can see that for the last two trading sessions breadth has also been not 25,000 is a very crucial level to watch out for. Unless we get close above that, we should remain cautious. On the lower side, if Nifty were to break 24,700 which happens to be Monday's low, then momentum selling could again emerge in the market. So, right now, we are in a very choppy range. It is tough to take a directional trade for the traders. But I would like to suggest support and resistance. Resistance would be 25,000 and support is at 24,700 in the spot Nifty. Once that is broken, we can exit the trading long PSU banks are actually looking strong on the positional charts. If I were to refer to the monthly and weekly time frame, they are still looking very strong on the charts and they can do well. We saw a breakout previously, but we cannot rule out the possibility of the short-term correction. So, overall, they are looking to the private sector banks, I still feel that PSUs are placed stronger on the positional charts. We can expect short-term corrections, but the overall trend remains bullish. We can expect 3%, 4%, 5% correction in the stocks in the PSU segment, but dips should be bought into if you are taking more than 15-day view in the market.
Economic Times
26-05-2025
- Business
- Economic Times
Matt Orton explains why dips are viable in the US market
Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads , Head of Advisory Solutions and Market Strategy,says following a strong rally, the US market's future direction hinges on marginal policy shifts, especially concerning tariffs. Investors should prepare for potential dips, particularly if they missed opportunities earlier. While earnings justify market gains absent tariffs, the market has already factored in a baseline tariff, reacting to specific trade deal developments and future we are going to continue to see is this back and forth. It has been happening since Liberation Day on April 2nd and the market has digested that. At first, the market prepared itself for the worst, very high tariffs across the rest of the world and the rally that we had through the month of April, throughout May has been quite spectacular. So, what the market has realised is earnings, the base from which we are going to come, how the economy has been growing, all of that is in a very solid place. The damage that tariffs are going to inflict is not going to put the economy into a recession. That has never been my base case and the pivots that we have seen from the administration help to confirm now that we have had this strong rally and since we do not really have the positive catalysts of the earning season coming, I suspect the market is going to be driven by these marginal directional changes of administration. I tell investors to be ready to use some of that downside if they were not as aggressive towards the bottom of the market in April because again the market is going to be able to see through all of this once we start getting increasing clarity.: The markets are baking in some of that. Obviously, the markets are not baking in the entirety of zero tariffs going forward. The market has digested a 10% baseline tariff across the entire world and now the reactions are going to be very much with respect to who is getting more, who is having the trade deal signed, and where we might start to progress in the near future. When you look at earnings, you can justify the move that we have had in the market because absent tariffs is obviously counterfactual, but if we had not had tariffs put in place, we would probably be at 7,000 plus on the S&P 500 after an earnings season that was almost double of what expectations have got some big companies like Nvidia reporting this week which are probably still going to be strong. I think the markets have baked in some good news, but they are not overestimating that, which is why I think dips are viable in the US there has been and when you look at all of the major global bond markets, there has been a lot of volatility and there has been a lot of steepening of yield curves, long-dated yields not just in the US but across all of the major economies and bond markets have been very elevated. Part of that is idiosyncratic, part of that is the large institutional buyers in those countries just have not been as aggressive. Japan, in particular, has not seen a lot of buying flow from anything, there may have been a little bit of selling from some of the insurance companies that tend to be systematic buyers. But the Japanese economy is tied to trade. There is uncertainty with respect to where that direction is going to go, which is why any sort of trade deal that gets inked in the near future can be a very positive catalyst for that market because before we got into April and before you had the large reciprocal tariffs, Japanese earnings expectations were one of the only countries around the world where you actually had positive and accelerating earnings expectations from if we can get back to a place where there is more certainty around trade, that will benefit the Japanese economy overall. It is a country to keep eyes on, but don't wade into that too early.
CBC
20-02-2025
- CBC
Financial, medical information stolen during cyber attack on Rainbow District School Board
A major school board in the Sudbury area is offering more details on the severity of a recent cyber attack, and what information was compromised. The Rainbow District School Board,says the cyber criminals responsible for an attack on the board's computer systems earlier this month stole sensitive personal information belonging to staff and students – including social insurance numbers and bank account information belonging to current and former staff members; social insurance numbers belonging to former students who received scholarships; and medical information for current and former students. The data breach affects people who worked for the board as early as 2010 and students who attended a school in the Rainbow District School Board as early as 2011. "We take this matter very seriously and apologize to all those who are affected," the board wrote in a notice posted to its website on Thursday. "We understand this news will be as concerning to you as it is to us and we are deeply sorry." Hackers accessed SINs belonging to scholarship recipients Criminals may have accessed the following information belonging to students, the board said: Personal information, including contact information, birth dates, academic achievement data, Ontario Education Numbers and, in some cases, medical and immigration information for all students who graduated between June 2012 and June 2024. Assessment information, medical diagnoses, health card numbers, behavioral information and information about accommodation and student support needs belonging to current and former students with identified exceptionality who have been enrolled in an Intensive Support Program (ISP) since 2019. Contact information and place of employment information for parents of the above groups. Social insurance numbers for former students who were enrolled in a Rainbow School since 2011 and who received a scholarship and a T4A slip for income tax purposes. In addition, the attack exposed school photos from the 2012-2013 to 2024-2025 school years. However, those photos are not attached to names or other identifying information, the board said. Anyone employed by the school from January 2010 onward is also affected, including full-time, part-time and occasional staff, it said. Hackers accessed the following data: Address and primary phone numbers of staff members from 2010 onward. Social insurance numbers of staff members from 2012 onward. Bank account numbers of staff members from August 2017 onward. Employee ID/compensation and benefit information/Ontario Ministry Educator Number (for teachers only) and police background check information for employees from September 2018 onward. In addition, they may have accessed medical information such as doctor notes, physical abilities forms and leaves of absence forms belonging to staff members from 2022 onward. The Rainbow District School Board has reported the cyber crime to the Greater Sudbury Police Service and the Ontario Provincial Police, the board said. It is offering a two-year TransUnion credit monitoring service, free of charge, to all current and former staff whose personal information was compromised. It's offering the same service to affected scholarship recipients whose social insurance numbers have been compromised and who have reached the age of majority. Former students who wish to sign up for the service should contact cyberincident@ the board said. Staff and former students who believe they have been victims of identity theft related to the incident should email the same address. The president of the Ontario Secondary School Teachers' Federation district serving Espanola, Manitoulin and Sudbury said he's heard from members who are concerned about the breach. But Eric Laberge said some are also experiencing déjà vu. Teachers hit with cyber attack previously "This is something that they – for the most part, especially those that have been hired more than three years ago – have gone through already," Laberge said. "Because there was a cyber incident with our provincial federation." The Rainbow board began experiencingtechnical difficulties with its computer system on Friday, Feb. 7, officials said. Officials took measures to protect the network and the data stored on it, they said, beginning a system-wide shutdown 10 a.m. that day at the Centre for Education and all 38 public schools in Sudbury, Espanola and on Manitoulin Island. By mid-afternoon, the board had confirmed and announced that the technical difficulties were due to a cyber incident.
