3 Sectors on which Kunj Bansal is Bullish in Medium Term

Overall given that the market structure has changed and there is little confidence in the market to say that the worst is behind us. Have we made a floor around that 16000?

Looks like yes, however it is always difficult to predict the market. In fact if we look at the last eight months, every time the trend has been that the market has corrected and then it has corrected and when it looked like the market has bottomed out then in the next correction it will go down further. fell down.

So we went from a peak of 18500 odd in October to 15200 in mid-June.

But this time the factors are different and finally the commodity prices have corrected. We’ve got a sharp improvement in steel, about 17-18% in aluminum, we’ve got a 15-16% improvement in copper too, so that’s a good thing.

Oil has also finally corrected although it was up again yesterday.

So a lot has opened up. At first this commodity correction appears to have given a breathing room reserve Bank of India So that ultimately their inflation target is not violated.

In addition, the government has this week restructured several duties imposed earlier on the metals sector, bringing some relief in terms of fiscal deficit numbers, resulting in the 10-year government security yield in the market falling by around 15 . bps

So at the macro level the breathing space has come but now the micro starts with the result season.

The results season for the first quarter is not likely to be good. Good thing it’s known in the market, so it was probably made when we fell around 15200 nifty Level.

We are at the peak of earnings season, so that’s an important question, especially when it comes to sectors like IT and consumption. We have received initial updates regarding the provisional quarterly figures. What do you make of it? Is this going to be one of the watchers on consumption and FMCG names that the market has already considered?
Yes, we can probably call it a cheater but the situation is not that bad. We have quarterly updates or previews of results coming from a significant number of consumption companies and it’s on expected lines, some of which are showing declines in single digits in terms of volumes.

Also, some of them are turning to growth, but only modest growth in the low to mid single digits.

On the price side, you certainly move into the high single digits as the price hike was passed on, but the price hike clearly caused inflation and demand along with weak sentiment did not.

So yes, it is expected that this quarter will not be that good for the consumption sector. Of course it is made in the market.

Almost one after the other in early June, most FMCG stocks hit their 52-week lows one after another within a span of a week to 10 days.

We have seen a recovery along with the market this week which has been good for consumption.

So the muted Q1 numbers are made to move forward, but it is expected that the recovery, which is more specific to agri commodities, will persist and result in some respite for FMCG companies.

The main thing is whether they inform the consumers about the correction in raw material prices or not. Even if they don’t pass straight they know how to do business, so they will present some sort of plan, offer, benefit, which will result in an attempt to drive sales.

Also, the progress of monsoon will also be monitored as it is slightly below normal at present, but it is too early to say so.

If it remains normal, we will improve rural sentiment which will also improve demand. So the expectation is that if this fall in agricultural prices continues, we will have good numbers for the September quarter and it seems that the market has started to build up and as a result consumption sector prices are starting to rise.

When crude is coming down we associate it with the fact that inflation can also come down globally and that is a positive point India, But we have CPI data coming in next week. What’s your expectation on that front and if there’s any sort of relief on the numbers, which areas do you think could very well add up to the upside?
Globally, oil prices have started falling below the peak of $120. Finally this week they have corrected to the 100 odd level.

For an economy dependent on oil imports, it is very important that oil prices remain low. Our rest will be around $70-$80 per barrel which is the place from where we are still very far but yes it will still impact inflation globally as well as in India.

The other part, unfortunately, is that the rupee has weakened sharply due to the dollar index and macroeconomic fundamentals. In addition, we have consistently observed foreign institutional investors outflow from India. So now all these factors combined will lead to imported inflation.

Our imports far exceed our exports, which will likely lead to a new wave of inflation that will be counterbalanced by the fact that metal and agricultural commodity prices have recovered.

So we’ll see that improving in terms of consumer prices, so these will be the variables that will have a near-net effect in the CPI numbers that will be released.

Next month’s CPI inflation numbers may impact oil prices but of course we should also note that oil prices on the ground in India have not corrected.

Nifty Realty has been performing well since last three weeks. We saw a large number of people coming. Any of those supporting plays on who you think might be the next movers because those cement packs and cement counters were pretty beaten up too. Do you think the momentum can pick up here soon?
Yes, so the real estate sector is one area where the demand for better consumption continues.

The demand for real estate is something that does not fall, although the interest rate has increased which has led to an increase in the interest rate on loan mortgages. So I don’t necessarily have a stock pick in that sector.

Auto subsidiary stock called Sona BLW is one such stock which I like. The company is doing very well and will continue to do well. It is expected that its June quarter figures will also be good.

A significant portion of the percentage of sales should come from electric vehicles which is a growing sector. The stock should perform well in the medium term.

(Disclaimer: Recommendations, suggestions, views and opinions given by experts are their own. They do not represent whose views) economic times,