The earning season is going to be hugely uncertain: Vaibhav Sanghavi, Avendus Cap

Avendus Cap's Vaibhav Sanghavi, in an interview to ET Now, discusses how destocking will be affecting the earning season and some recent happenings in price movements in the equity markets sector. Edited Excerpts:

What is your positioning ahead of earning season, are you advising your clients to raise cash or one should rather not be in a hurry to raise cash?

I think as you rightly mentioned the earning season is going to be hugely uncertain and purely because of destocking which has happened in the quarter and as well as this in terms of recent price movement or probably potential price movement in the equity markets I think the SEBI circular is going to have some amount of impact at least in this expiry so we would be a little uncertain on the course of the markets from here and that is why we would be relatively high on cash and hedge as well.

I do not know how closely you have been tracking AU Small Finance but would you have a thought here, were you a subscriber in the IPO?

These are the details which I would unfortunately not be able to share but in any case we think that the space the small finance banks are in as a sector is pretty exciting and if there is a quality management with some good track record as well as growth opportunities in terms of the business we would be buyers in this whole space.

Let us understand your positioning on pharma; are you buying the fare or it is too early to do that?

I think sector wise if you look the valuations are starting to looking little attractive, however, as one of your panelist mentioned a) is that the pharma is quite a bottom up story so in any case I think we would be looking at opportunities yes but our outlook has changed from negative to neutral. In addition to that we also think that because again just to at the cost of repetition the SEBI circular which is there on offshore derivatives position you might see some amount of short covering happening in this sector because it has been for some amount of consensus short as a sector so we might see some amount of positive reaction in that as well for this expiry.