Sandip Sabharwal, Prabhudas Lilladher believes more upside in store for Indian equity markets on the back of improving macros and upsides seen in global markets. “We should see 12-15 percent upside from here till the end of this year,” he states.
Sandip Sabharwal, Prabhudas Lilladher foresees 12-15 percent upside for Indian equities from the current levels by end of this year.
"The US markets are at all time high, German markets are also at all time highs, a lot of emerging markets are also moving there. That combined with the macro situation in India, which is showing improvement. The overall emerging market basket as such also looks poised for an up move over the next four-six weeks and India should participate in that," he said in an interview to CNBC-TV18.
Meanwhile, sharing views on Cobrapost's allegations on banks for money laundering, he said, this would not be long-term negative for banking stocks. "The allegations seem to show some transgressions happening at branch levels and therefore it doesn’t change the picture as far as investment thesis for banking stocks goes," he added.
Among non-banking financial companies (NBFCs) Mahindra and Mahindra Financial Services and Bajaj Finance are expected to do well.
Below is the verbatim transcript of his interview on CNBC-TV18
Q: How will you read the market? We have had a pretty strong run up in the past two-three weeks. Do you see significant up move from these levels above the 6000 mark on Nifty?
A: We have had an up move over the last few weeks and that was preceded by significant down move. So, we are marginally up but not much from where we were at the beginning of the year.
Putting that into context and also taking into account the fact that we see today with the US markets are at all time high, German markets almost at all time highs, a lot of emerging markets are also moving there. That combined with the macro situation in India where I believe the overall macros are improving for the stock markets per se, we could see some more up move going forward.
The overall emerging market basket as such also looks poised for an up move over the next four-six weeks and India should participate in that.
On one side we have positive macros coming through but on the other hand we have political situations where things are pretty uncertain on the governance part. This week the parliament will adjourn and the Supreme Court will have a six-seven week break after this week that could give some relief for the government to take some action on the economic front. Therefore that could also aid the market on the up move.
Q: As an investor how will you approach these Cobrapost allegations? Will that be any reason to downgrade earnings or to not buy any of those stocks because now everyone is in the net?
A: I don't think so because if one goes through whatever has been shown and actually the expectations had built up very significantly prior to today about something big coming through but they seem to be similar to things that came out earlier.
It shows transgressions happening at branch levels and at levels where people are trying to prove that they can be more helpful than they actually can be. To that extent structurally it doesn’t change the picture as far as investment thesis for any of the banking stocks per se goes. I don't think as an investor you will take a very long-term negative view on this.
Q: Coming to the earning season, what have been your hits and misses so far?
A: Hits have come from few auto companies where the companies have shown resilience in margins. So we have seen margins expand although the top line growth has not come through. Those companies have done well.
The private sector financials have done very well, where we have seen that NIMs (Net Interest Margins) have expanded, the asset quality has remained under control, which has been a positive.
Disclosure: Lot of the stocks discussed could be Prabhudas Lilladher's in portfolios.
READ MORE ON Sandip Sabharwal, Prabhudas Lilladher, Cobrapost allegations, non-banking financial companies (NBFCs), ICICI Bank, State Bank of India, Reliance Industries, ONGC, Cairn India, Reliance Communications, NIMs (Net Interest Margins), Titan Industries, Dabur India, Marico, auto companies
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