"Another 5-10 percent fall in the market would make the valuations attractive," Nilesh Shah said.
FY20 will be good in terms of earnings, especially if PSU banks are done with the provisioning, corporate banks are in better shape and crude prices stay low, says Nilesh Shah, Managing Director and CEO of Envision Capital.
From market valuation point of view, he said: "Another 5-10 percent fall in the market would make the valuations attractive. On trailing earnings basis, markets are probably trading at 21-22 times but at sub-20 levels there would lot of pockets of value."
With regards to earnings for the IT space, Shah said, "They are expected to be good for the biggies – the growth momentum is still there, volume growth would be good, the outlook overall is still robust and they have the tailwind of the currency as well. "So on the whole, they should be set for either high single-digit or low-double digit earnings growth," adding that it would be important to focus on the management commentary in terms of their 2019 outlook.
"However, earnings for autos may continue to be subdued for the next few quarters, which is symptomatic of the stress seen in rural India, farm stress etc because the incremental demand for the space was coming from the rural sector".
According to Shah, consumer discretionary is the space to be in. The house is upbeat on home developers and consumer appliances.Source: CNBC-TV18Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.