Based on earnings, valuations have come to long-term averages, so the risk-reward looks favourable for Nifty stocks, said DSP Investment's Gopal Agrawal
Gopal Agrawal, senior Vice President and head of macro strategy at DSP Investment Managers, spoke to CNBC-TV18 about current trends in the stocks market and shared his views on select sectors.
"Taking a view on Nifty, based on earnings, valuations have come to long-term averages, so the risk-reward looks favourable and interest rates too are on a downward bias. The third quarter earnings were mostly in line with expectations baring some inventory losses," Agrawal said on February 21.
Talking about the upstream companies that have gained traction due to lower crude prices, he said, "They have come to a reasonable valuation. There could be some upside in earnings for these companies with some of the underlying subsidy issues now under control. These companies are favourably placed in this environment of lower lighter fuel prices."
"The house is upbeat on capex companies as well as some commercial vehicle players that are expected to benefit from BS-VI transition", said Agrawal.
With regards to the software services firms, he said, "The IT space has benefited from rising bond yields in US and rupee tailwind for the last 12-15 months, he said, adding that rupee may still be where it is but the dollar has topped. The IT space will act as a bit of defensive play in 2019 but will still be part of the portfolio".Source: CNBC-TV18