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Alchemy Cap expects good Q4 show, but feels market needs 2 such quarters to retest previous highs

Hiren Ved also highlighted how the primary market needed a correction as well. The cooling off was bound to happen after so much money being raised at high valuations.

April 09, 2018 / 10:33 AM IST

After several years of tepid earnings growth, the March quarter numbers are likely to show healthy trends, experts believe.

“We should reach early double digits to mid-teens for the quarter…investors will be looking at how companies are talking about (the outlook) for next year,” Hiren Ved, Director & CIO, Alchemy Capital Management told CNBC-TV18 in an interview. In fact, if the monsoon will be good, we could finally see a 20 percent-plus number, he added.

Going forward, Ved also expects the market to remain largely in a consolidation mode unless there is two quarters of very strong earnings. “In that case, you can assign the probability that the market could test new highs that we saw in January,” he told the channel. So, it will all boil down to fundamental performance and quality will continue to outperform.

Ved also highlighted how the primary market needed a correction as well. The cooling off was bound to happen after so much money being raised at high valuations, he said, adding that only quality and reasonably valued IPOs are needed right now.

On a sectoral basis, Ved said that consumption could be the leading sector this year. He highlighted how the impact of GST and demonetisation is fading.

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Also, this being an election year, money is likely to be spent towards consumption, he said, adding that he is also betting on ‘sin’ stocks. “Tobacco and liquor are two categories, which seem to have a lot of promise,” he said.

In the financial space, Ved highlighted how NBFCs were in a secular bull run and the spike in bond yields earlier this year halted this rally. Given the state of PSU banks, he said, NBFCs and private banks have the opportunity to take away market share. Meanwhile, the automobile segment is a classic consumer discretionary segment one can bet on, he added.
Moneycontrol News
first published: Apr 9, 2018 10:33 am

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