Why Ajay Srivastava feels banks can't deliver superlative returns

Ajay Srivastava

Stocks continue to be very expensive, even as the market is seeing a normalisation. As people move to fixed income, the incremental money flows are slowing down, said Ajay Srivastava, CEO of Dimensions Corporate Finance Services, while speaking with CNBC-TV18 in an exclusive conversation.

He recommended investors balance their portfolios and get into fixed-income segments. "Non-MNC consumer stocks I think those are the first ones which will keep falling till they come to a peak of 2025," he opined.

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According to Srivastava, banking stocks have been overbought in India for a long time, and that is one of the reasons why they've underdelivered if everybody holds them. "Everybody's got stock of ICICI, HDFC and more. The amount of buying and stockholding of the Indian institutions' holdings in the bank shows that these are good quality stocks, but they cannot give superlative returns, he added.

If there was a sector to invest in the right, the paper sector is the place where investors can put their money due to their fundamentals.
The Indian stocks that have been re-rated are still at higher prices because they have not leveraged their capex despite having high market capitalisation.

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The government trying to spend the Rs 10 lakh is going to four or five companies at the end of the day because they supply most of the high-end capex goods, whether it is electric locomotive engines, transmissions or signalling systems.

The stocks that are trading at the PE multiple of 30 or above are not recommended despite their correction, Srivastava added.