Most of the positives of GST are already priced in according to Krishna Kumar Karwa, MD and CFO of Emkay Global Financial Services.
The market rally has also raised questions on the fairness in valuations against the earnings momentum. However, he believes the valuations are fair to reasonable.
He said investors must understand that one cannot time the market and with fresh money now. There has to be a tweak in return expectations.
“Look at Maruti, HDFC Bank and HUL’s earnings performance and the management commentary. If they are gung-ho about their prospects, it shows that the domestic economy has a strong momentum going as these (firms) are epitomes of domestic India consumption,” he told CNBC-TV18 in an interview.
Karwa does not consider PSU banks as an investment opportunity. The sector is a work-in-progress and there are lot of expectations for improvement in asset quality, he said. These stocks will always trade when valuations dip, he told the channel.
He said one could play the real estate sector on a geographical basis. “There are well performing pockets in South India as well as in Mumbai,” he said. While there is opportunity in the segment from implementation of legislations and affordable housing push, but it remains to be seen if many companies will make the most of it, he added. One could also look at housing ancillaries such as buildings, paint, cement and consumer durables, among others.Karwa is positive on rural India stocks. “The way government is spending on infrastructure and good monsoon is going to have a positive impact on rural India,” he said. One can buy into FMCG, consumer companies as they are a big opportunity as well.