"The renewable energy is a decadal theme as world is recognising that the growth can be sustainable if it’s fueled by green energy," Siddarth Bhamre, EVP, Research Head at Religare Broking, says in an interview to Moneycontrol. He believes, instead of searching for new entities, one should concentrate on current market leaders in conventional space which are evolving and adapting fast to the new world order.
With serveral years of experience in equity research, Siddarth Bhamre feels the valuations are attractive to take exposure in IT space. Any big correction due to earnings disappointment should be used in increasing exposure in this space, he advised.
What do you expect from the IT sector in Q2FY24 earnings?
Earnings of Accenture were not something which would give an immediate positive outlook for the sector. Hence, we saw some of our IT companies reacting negatively to the numbers. But aren’t we hearing about the US slowdown story since couple of years now? And because there is a good probability of IT companies struggling to achieve high growth for a few quarters or so, they are available at very reasonable valuations after underperforming since beginning of CY22.
The next few results in the IT sector may not instill too much confidence but valuations are attractive to take exposure in this space. Any big correction due to earnings disappointment should be used towards increasing exposure in this space.
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Your take on trading hours extension plan for the F&O segment and cash segment by the NSE... What would be the positive and negative impact of it?
I am not in favour of an increase in trading hours be it for F&O or/and cash segment. Also, the notion which many believe that this will increase volumes is misplaced. Volumes are anyway increasing, thanks to exchanges who are concentrating on F&O segment by giving different expiry days for different underlying’s so traders get volatility to play with on multiple days.
Too much of anything is not healthy and same applies for markets and also for F&O volumes. Today, most of the brokers are chasing clients who want to do F&O and the conventional way of healthy wealth creation has taken a back seat. Make no mistake, I am very positive of F&O options as an instrument to enhance your returns and reduce your risk, however, the way things are getting promoted are not healthy.
Also read: What should be your strategy for Bajaj Finance, PCBL, MCX India on today?
Do you expect oil prices to surpass $100 a barrel on the Brent crude futures considering the fundamentals?
Fundamentally, no. Rising interest rates in US, and China struggling to bring its high growth rate back on track are two strong reasons for oil prices to remain under check. Even, in any case if they go above $100 a barrel for any short term reasons, they may not stay there for long.
Will the flow of IPOs slowdown in October, after a rush in the September quarter?
IPOs are function of market performance. Q1FY24 was good for markets which led to many IPOs hitting the bourses. With markets now correcting/consolidating, we may not have the same fervor for some time to come.
Sectors where fresh exposure can be added in case of major correction?
IT is something which we have already mentioned despite earning headwinds. Indian auto sector growth is here to stay, so market leaders from the segments can be added and here too we are seeing there is valuation support.
Also read: Fundamentals strong but valuations far-fetched in SFBs: Divam Sharma of Green Portfolio
In financials, large banks and selected NBFCs are a must in your portfolio if one is playing the India story. Selectively, some of the consumer durables can also be added if market offers healthy correction.
Do you think the energy space, particularly renewable energy, will be a decadal theme?
Yes, it’s a decadal theme as world is recognising that the growth can be sustainable if it’s fueled by green energy. We are still in the evolving phase of this theme and, for now, we have limited options if one has to chase.
We believe one should concentrate on current market leaders in the conventional space, which are evolving and adapting fast to the new world order, instead of chasing new entities.
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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