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Last Updated : Jan 14, 2020 12:43 PM IST | Source: Moneycontrol.com

'Expect govt to dole out sops for agri, housing sector in Budget 2020'

No further income tax cuts are expected as the government will seek to have some control over revenues to keep the fiscal deficit in check.

 
 
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With the impending Budget, a policy push is expected by the government in terms of sops in the agri and housing sector. No further income tax cuts are expected as the government will seek to have some control over revenues to keep the fiscal deficit in check, Abhishek Bansal, Chairman, and Managing Director, Abans Group of Companies, said in an interview with Moneycontrol’s Kshitij Anand.

Edited excerpt:

Where is the market headed in the near term amid geopolitical concerns?

The Nifty Midcap has the potential to go even higher after underperforming Nifty50 in 2019. From a risk-reward basis, it looks attractive with levels of strong resistance at 17,650 and strong support is placed at 16,673 as per Bollinger Bands and Moving Averages.

The Nifty initially showed some shocks as a result of the potential escalation of tensions in the Middle East between the US & Iran.

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The situation remains volatile there, but the good news is that the majority of the US citizens do not back President Trump on an aggressive reprisal against Iran.

Indeed, there have been protests in Iran itself against war, hence we see the situation remaining at the status quo or stabilizing in the next few days which will positively impact the Nifty.

With the impending Budget, a policy push is expected by the government in terms of sops in the Agri & housing sector. No further income tax cuts are expected as the government will seek to have some control over revenues to keep the fiscal deficit in check.

Do you think the momentum will continue till Budget 2020?

The Nifty50 could move sideways with a risk on the downside. The level of 12,360 is likely to act as a strong resistance for Nifty50, and strong support is placed at 12,000 as per Bollinger Bands, while RSI shows overbought positions.

The large stocks in the economy are already at healthy levels; hence, we do not anticipate speculation and hence expect heavy-duty trading in these.

In the medium and small-term, we might see speculative trading in stocks and hence prices may rise.

There are conflicting opinions about unicorn stocks. On the one hand, these companies are raising funds from investors, on the other hand, historical evidence proves that very few unicorns have been able to make it into the big league.

Any sectoral trends which one should keep a track of?

The Bank Nifty has strong resistance at 33,000 and strong support at 31,400. Some of the crucial events which may impact D Street sectors are a favourable performance of private banks, with the successful resolution of the ownership tussle in Yes Bank having also boosted industry confidence in the private banking sector.

Given the good cinematic year of 2019 with multiple hits and the impressive show at the box office of new releases in 2020, the year augurs well for the entertainment industry.

A proposal is in the works for the revival of the ailing public sector MTNL, with that moving out and a possible easing of license fees by the Government to private players. This sector may see an upsurge.

Most of the automobile and two-wheeler makers have readied themselves for the prescribed BS6 norms, hence a growth over the dismal de-growth in 2019 Q3 can be expected. Indeed, discounted pricing for automobiles has almost stopped reflecting this angle.

What is your view on Infosys results? What do you recommend – buy, sell or hold?

The revenue has grown QoQ basis at 7.9 percent which is a slight let-down from expected growth levels of 9 to 11 percent.

The company had created an independent audit committee to look into the baseless whistleblower complaints.

Clients in the BFSI sector account for around 32 percent of the firm’s revenue. Despite the company’s efforts, the international banking sector is in a cautionary mode with elections looming in the US in 2020; growth will be subdued, which Infosys will have to make good from other customer segments.

Infosys has won several big-ticket international deals in the digital sector such as delivering digital and data initiatives to Telenet, a Belgian telecommunications provider & digital transformation for auto major, Volvo.

The high attrition rates too have come down due to an increased focus on employee engagement; an argument which is supported by Infosys winning employee engagement awards such as recognition as a 2020 Top Employer in Australia, Singapore, and Japan.

Also, their flagship global internship program, Infosys InStep, has been ranked number one in the Best Overall Internship category in 2020 Internship Rankings by Vault.com, a career intelligence organization.

What is your call on the small & midcap space?

The overall market breadth is expanding, and it looks like the Mid-cap and Small-cap is catching up with the Nifty. Post correction phase of the last two years, good valuation discounts can be found in these indices.

With the overall growth slowing down, the market expects the government to increase fiscal spending and favourable measures. A few measures already in effect are corporate tax rate cuts, huge infrastructure spending, and manufacturing incentives.

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.

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First Published on Jan 14, 2020 12:43 pm
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