In an interview to CNBC-TV18, market expert Anand Tandon said he expects to see an 18-20 percent earnings growth, "if everything goes as per plan" and feels Infosys may meet the lower end of guidance.
The market started the day in green with Nifty surpassing its 50-day moving average of 8410. Even the Sensex hit 28000-mark.
Meanwhile, discussing the recently-concluded bankers’ retreat Gyan Sangam in Pune, Tandon said the government shows intent that it is unlikely to interfere in PSU banks’ activities directly. This, he feels, may help in showing some uptick in PSU banks in the short-term.
Below is the transcript of Anand Tandon’s interview with Ekta Batra & Anuj Singhal on CNBC-TV18.Anuj: The year has started clearly in favour of the bulls what is your sense? Can 2015 be as good a year as 2014 was or would you be slightly nervous about the year at least for starters and would you recommend any kind of profit booking?A: Well the earnings are hopefully going to come through this year so there is no particular reason why you should be extremely nervous. That said some of the frontline companies are trading at higher valuations. If the game goes as per plan what you will find is that the earnings growth will be in the range of may be 18-20 percent and if that were to happen you should expect to see similar growth in the frontline index. This means that some of the companies outside the index would do better perhaps. There may be some hiccups along the way if there are changes in the global economy. Otherwise unless there is a disappointment on growth this year should be good for the market.
Ekta: Can you tell us what is your approach toward the banking stocks especially PSU banks will be in 2015? Do you think that take away from the Gyan Sangam were enough for you to get more confidence in terms of reforms which will be important?A: Lot of the takeway have to do with government interference. I would argue that this government is more likely to not interfere directly and may be therefore a little better off in terms of governance. Will that substantially change the performance of the bank I do not know because at the end of the day that is also question of changing the culture within the banks which is a lot more difficult to do and just changing the ownership or feeling the way the owners behave may not be adequate.
Anuj: What is your call on the IT space and Infosys in particular?A: The view is Infosys is not likely to do anything dramatic and will probably be at the lower end of its guidance. However, if you also see where the markets has placed the IT sector it has not done exceedingly well it has kind of re-middling around.Except for those companies which have delivered super normal growth by and large companies are trading at more or less 1 price to earnings to growth (PEG) which does not make them very expensive. So from a portfolio point of view one needs to be in it. I still believe that rupee will be under pressure during the year. We will get some tailwinds there but this is a year where growth will be at a premium so companies which are going to show better growth will be the once that will continue too attract investment attention and will become more expensive then they already are.From market point of view if interest rates were to fall which is what the consensus view is then the portfolio of bonds would do well and will allow some scope for these banks to pay down their non performing assets (NPAs). Overall it may be again place where PSU banks which are perhaps trading at lower valuations may see some uptake on a continued basis.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
