Narendra Solanki on where he is overweight and where underweight in current market
Narendra Solanki, Head Fundamental Research-Investment Services, Anand Rathi Shares, says the market remains stock-specific, with a positive outlook on banks, particularly public sector banks, and financials. FMCG, durables, consumer discretionary, and defence sectors also show promise, driven by strong order expectations. Domestic manufacturing, especially electronics, and the hospital segment within pharma are attractive, while in auto, two-wheelers like M&M, TVS Motor, and Hero MotoCorp are favoured.
ADVERTISEMENT Guess all things are pointing towards a buoyant market move. It has been a decent earnings season and now there is the early onset of monsoon as well.
Narendra Solanki: Yes, definitely. The earning season is almost over and few macro data points have also panned out to be right, especially the monsoons, the inflation environment, and the rate cut environment. These three along with the announcements in the Budget would definitely cheer up the festival season and the demand is likely to pick up in these segments for the next two to three months.
Banking, financials set to lead next leg of market rally: Ajit Mishra
The market has definitely given a thumbs up to all that and the overall mood is also optimistic for the market, especially on the revival of both rural and urban demand. All the sectors catering into these segments have been trading in a very optimistic manner.
What is the analysis of the earning season so far? What has managed to stand out? Where are you overweight and where are you underweight?
Narendra Solanki: The earning season was largely on expected lines and the market currently is still a stock specific market and on a sector basis, we are positive on banks and financials. Among banks, we favour public sector banks in comparison to private sector banks as a basket. Apart from financials, we are positive on FMCGs, durables, as well as consumer discretionary segments. On defence also, we are very positive. However, some stocks may appear to be highly richly valued but looking at the kind of orders which are expected to come in, the valuations were also somewhat good for those kinds of stocks. So, defence is also looking very good for a medium to long-term perspective.
Overall, the domestic manufacturing space, especially electronic manufacturing space (EMS), which has corrected somewhat, is also looking attractive. Overall, the domestic economic environment and domestic involved manufacturing companies are looking very good.
In pharma, we are more positive in the hospital segment rather than the pharmaceutical companies or drug companies. In auto, we are more positive on two-wheelers' entry space, the likes of M&M, TVS Motor and Hero MotoCorp rather than the passenger vehicle segment. These are our sectoral bets.
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