Going forward, Nilesh Shah said that March quarter earnings are very important for the market, but the key thing to watch out for is the guidance from corporate India.
Post the correction in equities from its peak in January, a phase of consolidation has gripped the Dalal Street.
Stating that if this consolidation phase continues over the next quarter, Nilesh Shah of Envision Capital observed that it will be healthy for the market. “You could see the Nifty achieving 11,000-mark over the course of one or two quarters,” Shah, MD & CEO of Envision Capital told CNBC-TV18 in an interview.
He said that going forward, March quarter earnings are very important for the market, but the key thing to watch out for is the guidance from corporate India. Additionally, if the monsoons are normal and commodities see less upside, then the 50-share index get soon go up to 11K mark.
Shah presented his views on multiple sectors. Here is a breakdown of his comments:
Shah believes that it makes sense to be in this sector as the outlook for this remains positive from 2-3 year perspective. “New areas have started giving larger revenue share for these companies… the guidance is going to be in high single digits. There could be double digit growth in these companies in a few quarters,” he told the channel.
Within the space, he sees big opportunity in the midcap IT space. Good performance is likely for those who perform well in a particular domain or niche, he added.
One should clearly avoid the sector right now, as we are also entering an elections zone. It looks like the government is not giving complete freedom in pricing as well. Having said that, one could look at engineering companies in this space and stick to them. Away from oil and gas, one could look at gas transmission and gas utilities as well, Shah said.
Shah believes that the entire space looks very good, especially for sectors such as travel, tourism, and hospitality, but appliances look a bit expensive. Meanwhile, hotels would be the lower most in term of a pecking order in these companies.
NBFCs & insurance
Insurance is a good opportunity as the country still continues to be underinsured, he said.
In case of NBFCs, he prefers private sector banks as the former will have a lot more pressure in costs. Within private banks, he likes tier-2 banks and smaller banks. He also sees value in exchanges (bourses) as well.
PSU banksShah recommends avoiding PSU banks, even from a long term investment perspective. “There are structural issues that need to be addressed. In the meantime, one can look at private banks which are giving double digit earnings growth,” he said.