A bit of sideways consolidation in markets is not completely unwarranted as overall outlook continues to look good, said Dhiraj Agarwal of Ambit Capital in an interview with CNBC TV18 on July 24.
The market expert believes the earnings season started off well and the market outlook is looking strong. “Any company sector which is reporting good growth numbers or relatively better growth numbers as compared to its peers or other sectors are finding favor in the market” he said.
Agarwal pointed out that despite a weakening consumer demand, as was reflected in HUL numbers, the investments’ gravy train continues. “We are seeing good credit growth, good amount of capex growth, etc. So that relative shifts keep on happening in the market at all points of time. And stocks are rotating very, very fast in the current cycle as compared to what we have seen before,” he stated.
The ace investor pointed that in terms of sectoral growth, India is witnessing diverse stories. Here’s what Agarwal thinks about the different market sectors:
- There is further scope for re-rating in the banking sector, said Agarwal, but not as sharply. Agarwal is bullish on the ICICI stock owing to its consistent delivery, but has a divided opinion on the HDFC Bank.
- In the auto sector, Agarwal likes Eicher Motors. He believes that the company not only has a niche in pricing, but is also expanding into a new segment in the global market in the 350cc to 500cc range. The electric vehicles (EV) space has a long way to go, pointed Agarwal. He is eyeing the Tata Motors stock and TVS stock in the EV space.
- Agarwal believes valuations are still not cheap in big IT names.
- In the new age stocks, the investor retains his bullish sentiment on Zomato.
- The tech and consumer sectors are dragging down the market rally but the capex cycle, spending and credit growth are looking strong, said Agarwal while instating his growth outlook regarding the Indian markets.
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