Retail investors still cautious about markets: Emkay

417 Investors following NMDC. Share this News with them.

0

Like this story, share it with millions of investors on M3

Retail investors still cautious about markets: Emkay

The markets, both domestically and globally, are in a consolidation mode, says Krishna Kumar Karwa, Managing Director, Emkay Global Financial Services. However, there are no reasons for the Nifty to go down to 4,500-4,600 domestically. “The crack in the market if any will only come from global cues and global flows.”

Post your opinion here

 

0

Tweet

Share on Tumblr

Excerpts from Bazaar on CNBC-TV18 Watch the full show » RELATED NEWS NMDC valuations look stretched above Rs 300: Udayan NMDC follow-on offer opens today NMDC may settle around Rs 300-320 post issue: SP Tulsian ALSO READ See what other experts are saying about markets See what FIIs are saying about the markets See what Udayan Mukherjee is saying about the markets BSE | NSE 01/01/70 Are Mutual Funds betting on ?

Q: What about the whole crop protection space, what excites you in that end. Do you think it's a big business opportunity and does it have enough stocks to attract institutional interest?

A: If you look there are two big daddy's in the sector domestically which is United Phosphorous and Rallis which have reasonably large amounts of institutional interest. The second line of companies includes those which we believe are in a position to make the move to the next level. So you a have lot of companies in that sector which are at Rs 800-1000 crore of revenues and they are quoting at around 0.5 to 0.6 in terms of market cap to sales and most of these companies are quoting at around 6-7 times on a PE basis.

If you see growth and profitability numbers of most of these second line companies they have all in terms of return on investments (RoEs) gone beyond 25-27% and look that these ROEs should be sustained. So we believe that institutional interest in these second-line companies should now come into play and there should be opportunity for investors.

Q: There was a lot of interest for a while in food-related stories, like the rice stocks are you profiling anything from there as well?

A: No we are not profiling any of the rice processing companies in our agri conference. I think primarily the sector suffers from their high working capital cycle.

Q: So you are largely with enablers like fertilizers, crop protection that space?

A: Absolutely, fertilser, seeds and crop protection chemical, these are companies we are showcasing in our agriculture conference.

Q: Why not something like a Jain Irrigation which would fit the bill of an enabler for agriculture?

A: Certainly, we are bullish on that company also. Since you asked me specifically about the companies, we are covering in the conference that is why I mentioned those that we are covering. Jain Irrigation is under our soft coverage an in future we should also be covering that.

Q: To step away from the conference, what do you make of retail interest right now in the market? We had a dull pre-budget phase then a relief rally. Are you getting the sense that retail has come to any part of it?

A: No, retail is a risk averse. So participation from the retail investors is not as high as anybody would have expected in a market, which has doubled in the last 12 months. Retail investors are very cautious and are willing to be on the sidelines the moment they feel the markets are consolidation phase or looking over valued. Overall, retail participation throughout the year has been muted, not in sync with the way markets have given an upside from its lows.

Q: Anything exciting you are watching out from the primary offering space over the next month or so because there are few small ones, aside of the government's stable which are coming up?

A: No we have not looked at any of the smaller IPOs which are expected in the next one month or so. So I don't think we are concentrating on that part of the market.