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May 28, 2013, 10.35 AM IST | Source: CNBC-TV18

Antique sees FY14 earnings growth at 16%; bets on 7 stocks

Sectors like metals, autos and oil and gas ould contribute little more in FY14 as compared to IT or FMCG sectors, which did well in FY13.

Fourth quarter earnings were a mixed bag given that sectors like pharma, fast moving consumer goods (FMCG) and automobiles performed well, but cement and industrials held back. So, one cannot be sure of which way the earnings momentum is heading, Dhirendra Tiwari, Antique Institutional Equities said.

However, he estimates FY14 earnings growth at 16% resulting from an earnings per share (EPS) of Rs 1,400. "Concentration or shift of earnings will take place in FY14. Sectors which would contribute little more in FY14 could be metals, autos and oil and gas as compared to IT or FMCG sectors," he told CNBC-TV18.

From the capital goods space, Antique is bullish on Crompton Greaves and is neutral on Voltas . Coal India is his preferred pick from the in the utilities and infrastructure sector. There are three basic catalysts for Coal India - Production growth, dispatches growth and price realisations. Though the stock may get impacted by external factors in the near-term, but Rs 300-315 is a good price from one year plus horizon, he elaborated.

From the pharma space he recommends investors to look at Dr Reddys and Lupin , which have been performing well for quite sometime now. He sees 15 percent upside in Lupin from current levels.

He is also upbeat on oil companies like Bharat Petroleum Corporation (BPCL), Oil and Natural Gas Corporation (ONGC), Oil India on the back of diesel price cut and crude oil prices softening.

Below is the edited transcript of Dhirendra Tiwari’s interview with CNBC-TV18

Q: How are you feeling at the end of this earnings season? Have you marked down earnings expectations of a lot of companies in the last 10 days?

A: Earnings season has been the trend for past many quarters kind of mixed bag. Honestly speaking it has been very difficult to find out any trend in any industry. Most private sector banks did well, public sector banks are not doing so well. Part of pharmaceutical companies did well and some of them are not doing well.

Broadly speaking, earnings have been on the positive side for a few sectors like pharma, Fast Moving Consumer Goods (FMCG), to some extent automobiles. It has not been so good for some of the old economy sectors like cement and industrials.

So, those sectors have been at the receiving end as far as the earnings are concerned. I would say no specific trend emerged, but it was tad on the lower side with respect to expectations for broader section of the market.

Q: Has it caused you to mark down or mark up expectations for FY14? What would be a reasonable estimate for the next year?

A: For FY14 we are as of now looking at something like little over Rs 1,400 EPS estimate, which is about 16 percent odd growth. Chances of too much variation are very slim, because earnings are heavily dependent on a few sectors like oil and gas and IT, whereas there have been some disappointment in sectors like IT.

Some positive move in the earnings was seen from the oil and gas sector. I would not say there will be too much of variations as far as the earnings are concerned, but concentration or shift of earnings will take place in FY14. Sectors which would contribute little more in FY14 could be metals, autos and oil and gas as compared to IT or FMCG sectors, which contributed little more in FY13.

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