The market has seen some consolidation after hitting a fresh record high of 36,928.06 on the Sensex on hopes of stable earnings growth in Q1 and FY19. But the Nifty is still few points away from its earlier record high of 11,171.55.
It is just a matter of time and the index will be there at its record high in few days, Ratnesh Kumar, MD and CEO, BOB Capital said in an interview to CNBC-TV18.
But the returns in 2018 could be in single digits, he feels. "I would still be happy if the market ended the year with single-digit return."
The Sensex, so far, has rallied 8 percent in 2018 and the Nifty has gained nearly 6 percent on top of 28 percent upside in the previous year.
Even the broader markets are likely to end the year with single-digit return, he feels. The Nifty Midcap index plunged 12.5 percent and BSE Smallcap index lost 16 percent in 2018 against 47 percent and 60 percent rally in 2017, respectively.
After the recent correction, momentum and valuations froth have gone away; so it is a good time to look at midcaps (where 20-30 percent earnings growth is expected) with couple of years' perspective, Ratnesh Kumar said.
Home building Space
Home building stocks are generally doing well and will continue to do so, he said. "My focus is towards mid-sized companies, be it paint, ceramics or durables."
Air conditioning and Air Coolers Space
Symphony share price corrected over 19 percent intraday today after dismal earnings performance in Q1FY19.
It is a seasonal factor playing in the air conditioning space, he said, adding he sees secular growth in the sector around 15 percent and would stick to theme in long term.
Auto
Demand fundamentals are steady in the auto space. He prefers car segment (four-wheeler) in the whole auto sector rather than two-wheeler due to pricing competition and margin weakness.
Cement
Cement has had a good run. So Ratnesh Kumar sees some pause for the momentum. But he believes it is a good sector to be in for long term as infrastructure story would continue.
Financial Services
The valuation froth had been built up in the financial services space, which cooled off a bit now. He believes growth story is going to come in the space as these financial services companies may get some share of banks going forward.
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