Moneycontrol
Nov 07, 2017 11:11 AM IST | Source: CNBC-TV18

Trends shifting toward organised sector post GST, note ban; Q2 show better: Emkay

Krishna Kumar Karwa said that several companies in Emkay’s coverage have seen earnings upgrades.

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The past 6-9 months has seen organised sector’s position getting stronger says Krishna Kumar Karwa, MD of Emkay Global referring to the impact of demonetisation and GST on unorganised sectors.

“…and they (consumer firms) are seeing benefits in terms of performance. Jewellery segment (for instance) is seeing better organised play,” Karwa told CNBC-TV18 in an interview. However, he also pointed out the large share of unorganized sector yet in building materials market.

Speaking on the earnings performance, Karwa said they have broadly been better than estimates. Within its coverage universe, several earnings estimates upgrades along with EPS upgrades are seen too. “Many segments are seeing restocking, which is reflecting in consumer companies,” he told the channel.

However, he said the Street has to be cautious of hardening global interest rates as they could have an impact on inflows into emerging markets. Further, if there is any adverse, unexpected reversal in trends or numbers on the political front with respect to Gujarat and upcoming elections, then there could be a temporary blip too.

Karwa is also betting on the rural India theme and believes it could be a segment that delivers growth for corporates. He also likes fertilizer companies as a part of rural India theme.

He is bullish on oil marketing companies (OMCs) as high oil prices mean oil majors should deliver good numbers.

In the financial space, he believes the run up in PSU banks would be temporary until ‘human capital is transformed drastically'.
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