DAILY VOICE | Rather than fearing market volatility, learn to use it to accumulate good companies: Vineeta Sharma of Narnolia

Currently, the market is riding on high optimism as far as the next fiscal corporate earnings growth is concerned.

March 08, 2021 / 08:59 AM IST
 
 
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Vineeta Sharma of Narnolia Financial Advisors feels in the last couple of years women participation in the equity market has improved owing to higher education of women and digital means through which one can participate in the market in an easy manner.

"Going forward, as women get more confident about decision making and more and more information and analysis gets available digitally, their participation is set to improve even further," said the Head of Research, Narnolia Financial Advisors in an interview to Moneycontrol's Sunil Shankar Matkar.

Edited Excerpts:-

Q: What is your advise for women who want to enter into equity markets?

Equity is an investment asset class, a store of value similar to more other investing asset class like real estate, gold and bank fixed deposits. More importantly over a long period of time, returns generated by equity are higher then all other asset class.

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Q: Do you feel we need more women investors in the market like we have had in past year?

In the last couple of years women participation in the equity market has improved owing to higher education of women and digital means through which one can participate in the equity market in an easier manner. But equity as an asset class still is under-penetrated in an overall sense in India and women participation is even lower. But going forward as women get more confident about decision making and more and more information and analysis gets available digitally, their participation is set to improve even further.

Q: What are the challenges and opportunities available for women in equity market right now?

There are two key challenges that we face as equity investor. Equity returns are non-linear unlike say a bank fixed deposit. Non-linearity here implies on a short term basis returns are not constant and at times we have to see paper losses in our equity investment and that requires perseverance to stay confident of long term good positive returns. And the second challenge is to identify the right stocks to invest in. And here as women we rather have an advantage as we are a key user of many companies' products and services like consumer durable, consumer staples. If we do a bit of financial analysis and understand among the companies whose products we like which all have better financial strength we will be able to crack this challenge and can build a good equity portfolio.

Q: Is it time to be cautious now considering the volatility in the equity market for last three weeks? Also do we have to really worry about rising bond yields and dollar index?

Economic trends particularly in a highly connected world will always have some uncertainty component. But rather than fearing market volatility, we have to learn to use these volatile periods to accumulate more investment into companies that we like during market falls. Rising bond yield is surely negative for stock markets valuation and going forward we have to keep an eye on how inflation pans out.

Q: Top five stock ideas for women investors that can give good returns by Women's Day 2022?

Titan Company: Buy | CMP: Rs 1,474 | Target: Rs 1,872 | Return: 27 percent

Consumer spending in India is likely to grow from $1.5 trillion at present to $6 trillion by 2030, making it the third-largest consumer market in the world after US and China. Upper middle-class and high-income segments are expected to grow from being one-in-four to one-in-two households by 2030.

68 percent of jewellery business comes from unorganised sectors. Hallmarking and Introduction of GST in Jewellery has been important changes in the sector. Titan has an asset-light distribution model, enriched jewellery portfolio and has invested in brand building which is enabling the company to record better than industry growth.

Whirlpool: Buy | CMP: Rs 2,412 | Target: Rs 3,300 | Return: 36.8 percent

Whirlpool has a strong brand image in washing machine and refrigeration segment. These two segments have a long growth period ahead. This is one consumer segment where not only premiumization has to take place but also penetration is set to improve. As our per capita income grows, we will be shifting from semi-automatic washing machine to top load to front load machines. Also, in refrigeration, we have to move from single door, to double door to side by side door and French door machine. These migrations provides ample growth headroom for players like Whirlpool.

Trent: Buy | CMP: Rs 881 | Target: Rs 1,100 | Return: 24.9 percent

Trent's strong balance sheet, strong business positioning and stores expansion plan make it attractive for long term investment. Despite the challenging environment, Westside has been delivering better than industry growth. Post Covid, the trajectory of revenues has continued to improve month to month with encouraging trends. As per management, in Jan 2021 (end of season sale month), traction for full price merchandise was consistent with the levels witnessed in the previous year in both quantity and value terms. The company’s working capital is well managed. The inventory turnover is best in the industry.

Infosys: Buy | CMP: Rs 1,316 | Target: Rs 1,500 | Return: 14 percent

We expect market share gain alongwith increase in the speed of digital transformation. On account of healthy pipeline and robust large deal wins in Q3 along with exceptionally high deal wins with the highest ever total contract value (TCV) of $7.13 billion, we remain positive on the stock.

ICICI Bank: Buy | CMP: Rs 609 | Target: Rs 750 | Return: 23.2 percent

ICICI Bank in Q3 saw a strong quarter with steady improvement in NII led by healthy advance growth, pre-provisioning profit was supported by lower cost to income ratio and gain from sale of stake in subsidiary, advance growth during the quarter was strong led by Retail and MSME segment while the deposit traction was also healthy. On the asset quality front Pro-forma GNPA and NNPA did not witness big increase QoQ and on the provisioning front. Bank is holding a contingency provision of Rs 9,984 crore and believes it should cushion the bank against the future shocks and thus expect normalization of credit cost in FY22.

Q: Do you expect the March quarter earnings to be better than last three quarters and will the March quarter earnings decide growth trajectory for coming quarters?

Yes the commentary of various managements suggests strong fourth-quarter earnings. Also during the March quarter results, we will get to become confident of FY22 earnings trajectory. Currently, the market is riding on high optimism as far as the next fiscal corporate earnings growth is concerned. But there is also some near term concern on margin fronts as commodity prices have gone a lot high.

Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Sunil Shankar Matkar
first published: Mar 8, 2021 08:59 am

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