Saurabh Mukherjea of Ambit Capital decodes sectors to invest in the new calendar year in an exclusive interview with CNBC-TV18.
The Indian market climbed all wall of worries in the year 2017 but which sector will work in the year 2018? Saurabh Mukherjea of Ambit Capital decodes sectors to invest in the new calendar year in an interview with CNBC-TV18.
Metals & Mining:
The sector which was among the top-performing sectors in the year 2017 is likely to continue its dream run in the calendar year 2018. The metals & mining sector are beneficiaries of global economic recovery. The demand could pick up without any significant change in supply dynamics. Capacity augmentation in this sector is a long time coming.
The road and construction sector which also outperformed in the previous calendar years could well find favour in 2018.
On the back of two GST rollbacks in the last year, consumer discretionary as a theme will see some activity. More specifically, Auto and OEMs will have good 12-15 months until GST is tightened again.
CASA Funded Banks:
If you are aggressive investors then CASA funded banks as a play on the economic recovery will be a good theme to bet on. As inflation picks up, wholesale market borrowing costs will rise and that will hurt the NBFCs – which will shift the market share towards CASA-funded banks.
Better PSU, private sector banks will do quite nicely on the back of economic recovery.
Our IT analysts suggest US President Donald Trump is falling in love with Indian IT. The hostility which we saw in his speeches against H-1B visas 6-7 months ago seems to have dissipated.
The pullback over the last 12 months has put atleast 2 out of big 4 IT stocks are at a place where valuations aren’t that demanding. If you have attractive valuations, proven track record, healthy cash flow delivery, give dividend and return capital employed is good that 2 out of 4 stocks which have a good run.I think there is more upside for IT companies going ahead. The worst of regulatory storms seem to have passed it companies, said Mukherjea. Indian IT companies stand to benefit if EU & American economic growth continues, he said.