"The quarterly results so far on an aggregate basis is on expected lines," Shailendra Kumar, Chief Investment Officer at Narnolia Financial Services says in an interview with Moneycontrol.
Kumar further says the positive surprise this quarter (Q4FY24) has come from capital market companies. Capital market companies are becoming an important category inside the broader universe of BFSI, he believes.
In the midcap space, it’s advisable to pick companies only from sectors exhibiting very high growth like capital markets, electronics, semiconductors, real estate, media, power equipment, and energy, says Kumar who has more than two decades of experience in the fund management and investment advisory.
What is your overall view on the ongoing corporate earnings season for Q4 and FY24? Any disappointment as well as surprise?
The result so far on an aggregate basis is on expected lines. Engineering and industrial product companies continued to report strong growth. The positive surprise this quarter has come from capital market companies. Capital market companies are becoming an important category inside the broader universe of BFSI.
Media companies are also coming out with significantly improved performance. IT companies continued to disappoint. Their growth continued to remain sluggish and there are no signs of meaningful improvements even for the next financial year.
Have you seen significant fundamental shift in the telecom space, especially after the beginning of Vodafone Idea 2.0 following the big fund raising?
We have maintained an overweight stance on the telecom sector for the last 2-3 years. Average revenue per user (ARPU) has significantly improved for all the major players and capital expenditures have stayed benign. Vodafone Idea fund raising will further add to the positivity for the sector.
Have you changed your view on the technology stocks, especially after March quarter numbers?
We have underweight recommendations on the IT sector since 2022. We continue with our underweight stance. There is still no sign of acceleration in growth. Slow execution as well as some cancellation of order book is happening. We are looking forward to moderation in valuation multiples to change our stance.
Do you think the stock picking looks difficult in midcap space, given the elevated valuations?
Identifying companies with highly attractive valuation multiples in a bull market is always challenging. Right now, largecap stocks are better priced.
In the midcap space, it’s advisable to pick companies only from sectors exhibiting very high growth like capital markets, electronics, semiconductors, real estate, media, power equipment, and energy. Selective midcap companies in pharma and auto components also look good.
Do you see next leg of growth in the defence and railways space?
Both defence and railway companies are witnessing structural improvements in their business performance. But near-term valuation multiples are stretched particularly for railway companies and investors should wait for corrections before buying.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
