Moneycontrol
Dec 07, 2017 12:53 PM IST | Source: Moneycontrol.com

Credit Suisse expects cuts to resume in Indian market; likes SBI, ONGC and Tata Steel

In a report, the research firm has said that structural reforms have weakened near-term visibility. Weak agricultural income growth to lower broad-based consumption.

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As the Indian market witnesses a corrective phase, Credit Suisse is not very upbeat about its prospects going forward.

In a report, the research firm has said that structural reforms have weakened near-term visibility. Weak agricultural income growth to lower broad-based consumption. While the market is not relatively expensive, but cuts should resume.

Further, it said that there was an unclear outlook with low utilisations to keep investment demand weak.

Going forward, it believes that 2018 could be less uncertain but growth could still be weak. Changes in market sentiment to drive volatility as 2019 elections approach. It expects double-digit EPS growth in FY19.

On stocks/sectors, it is overweight on energy and metals, PSU banks and IT. It is underweight on high P/E sectors with possible EPS cuts such as NBFCs, cement, consumer discretionary and staples.

Among stocks, it has an outperform call on State Bank of India, ONGC and Tata Steel. While it has an underperform rating on Bajaj Finance, UltraTech Cement and Dr Reddy.
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