See earnings upgrade in consumer space on Kharif output:Deutsche

Abhay Laijawala of Deutsche Bank says with record Kharif output likely to give significant boost to rural consumption sentiment and other factors such as 7th Central Pay Commission also supporting aggregate demand in the economy, it will likely result in consensus upgrades to earnings of consumer and rural interfacing sectors and stocks.

September 26, 2016 / 10:35 IST

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Abhay Laijawala of Deutsche Bank says with record Kharif output likely to give significant boost to rural consumption sentiment and other factors such as 7th Central Pay Commission, lower interest rates and easing liquidity also supporting aggregate demand in the economy, it will likely result in consensus upgrades to earnings of consumer and rural interfacing sectors and stocks.

These include two-wheelers, tractors, white goods, home improvement, commercial vehicles, housing finance and retail finance, he adds.

He feels key stock beneficiaries should include Hero Motocorp, M&M, GSK Consumer, Nestle, Shriram Transport and Whirlpool India.

Meanwhile, Sanjay Mookim of Bank of America Merrill Lynch says several reforms like GST, bankruptcy code, real estate bill etc should benefit the economy as they are implemented over the next 2-3 years.

Indian equity valuations have expanded meaningfully on global flows. Midcap valuation premiums are at all-time highs. All this points to heightened risk, he feels.