VALUATIONS EARNINGS
ETMarkets AIF Talk: Earnings likely to be next big trigger for equity markets; shifting to quality makes more sense: Vikaas M Sachdeva
But it seems like the markets have regained confidence. Third term, same government, acceleration towards infrastructure investment I think that is what is driving this optimism.
Valuations take centre stage as Sensex touches new peak
Majority of the Sensex constituents now trade above their respective long-term average valuations. It means investors need to be selective while accumulating blue chip names.
Valuations are up... will profits keep pace?
The market's high valuations necessitate positive earnings surprises for comfort, with bond yields and investor sentiment influencing market trends significantly.
Earnings growth likely to be in mid-teens; overall growth trajectory remains strong: Shibani Sircar Kurian
The building materials segment, specifically tiles, has underperformed despite significant real estate growth. Typically, when real estate sales pick up, demand and volume growth in building materials follow with a lag.
Stock picks of the week: 5 stocks with consistent score improvement and upside potential of up to 29%
The bullish mode and mood of the market, which is already in place on the street as the nifty touched new high, is likely to get a boost as the first indication of return of FPI comes to markets. The budget and the narrative which gets built post that is going to play an important role in that. Maintaining fiscal discipline and announcing continuing policy push for key sectors would be key for that. We look at stocks which have witnessed a continuous rise in their score in the last one month. These selected stocks depict a strong upward trajectory in their overall average score which is based on five key pillars i.e. earnings, fundamentals, relative valuation, risk and price momentum. This implies that there has been a significant improvement in their market outlook in the given time frame.
Midcaps stocks for long term investors: 5 stocks from different sectors with right financial & growth matrix and upside potential of up to 49%
Buying quality stocks should be one of the basic principles while investing in markets. But when one is buying mid-cap stocks this principle becomes even more important for multiple reasons. At this point of time, when valuations are high and small corrections can lead to strong negative reactions in stock prices. So, while capital gains is the objective, never lose the perspective of protecting capital from sudden shocks. Now how does one do it? Look at the underlying business which is best understood by going through its annual report and look at a certain basic ratio in order to figure out how much return that underlying business can generate in best and worst case.
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Stock picks of the week: 5 stocks with consistent score improvement and upside potential of up to 25%
Every now and then the nifty keeps witnessing volatile movement, the difference this week was amidst all the intraday volatility because the bias of volatility has changed, nifty was able to touch a new high. Also because market breadth was positive, the trend for the majority would be bullish. Given the fact that macros are shaping for good, it appears that there is no reason for bulls to leave their control any time soon. While being bullish, be ready for a phase of volatility. In such times, if one is taking fresh exposure to equity, ensure that there is some level of quality as far as the business and fundamentals are concerned. These selected stocks depict a strong upward trajectory in their overall average score which is based on five key pillars i.e. earnings, fundamentals, relative valuation, risk and price momentum. This implies that there has been a significant improvement in their market outlook in the given time frame.
Focus on the core business and track record: 4 midcap stocks from different sectors with potential upside of up to 31%
With election results behind us, the focus of the street is on the first budget of this government. In the run up to the budget market may stay in range bound mode and post budget there could be a strong directional move. If that directional move is in upward direction, there is a high probability that mid caps would once again see another round of party. So, while being bullish, one should also be more careful in selecting the stocks. See if the company has a track record of paying dividends. While the dividends are ignored in general by investors and more particularly in a bullish market as the whole focus is on capital gains. The fact is that a dividend is a reflection of the underlying business and that is what one owns when one buys a stock. We take a look at 4 stocks, which on one hand have seen an improvement in their score in the last one month, plus they have outperformed nifty and they also meet the certain critical criteria on financial ratios.
Industrials strong, but be careful about valuations: Hiren Dasani of Goldman Sachs Asset Mgmt
"Emerging market equities, as an asset class, are not seeing inflows. They have seen outflows. The US is doing much better than the broader emerging market. The other dynamic is there is also a very strong AI (artificial intelligence)-driven theme that is driving the markets like Taiwan, which is a global supply chain for the entire AI-related and semiconductor segments"
Bet on largecap, index stocks; try and take your portfolio to safer sectors: Dipan Mehta
The larger ones, the large banks, the large IT companies, the large pharma companies, they are still in that ballpark figure of 15 times to 30-35 times trailing 12-month price to earning multiple.
What does the earnings growth outlook look like for next year? Sahil Kapoor answers
Very few countries have been able to do it and our data tells us that no more than two to three countries have been able to deliver 5% to 6% real returns even for investors who have been the most disciplined.
Kotak Institutional Equities disagrees with 'bullish' valuation of power stocks NTPC, Power Grid
Kotak Institutional Equities has expressed disagreement with the investor bullishness in the electricity sector, particularly regarding NTPC and Power Grid stocks due to 'wrong valuation methodologies'.
Valuations & earnings will take precedence soon says Feroze Azeez of Anand Rathi Wealth
The market's reaction has been quite volatile due to the exit polls. From a trader's perspective, it's been a seesaw. For investors, it’s important to remember that markets typically fall 10% from the peak twice a year.
Valuations in PSU capital goods, infra & defence remain expensive: Pratik Gupta
The macro environment is extremely stable, whether it is the fiscal deficit, the current account deficit, inflation, forex reserves, so that is really one of the big attractions for both global as well as domestic investors.
India’s premium valuation may come under pressure amid fractured election mandate
Nearly half of the Nifty 50 constituents currently trade at a premium to their historical averages. Among major global indices, the S&P 500 trades at a forward price-earnings (P/E) of 20.6, 29% higher than the long-term average
Top Nifty50 stocks analysts suggest buying this week
The latest Stock Reports Plus report dated June 2, 2024, highlighted Nifty50 stocks with 'Strong Buy/Buy' recommendations. The report evaluates key components of listed stocks to generate standardized scores for actionable insights.
There is a rebound in FMCG today, IT stocks could be next, don't write them off: 10 IT stocks with upside potential of up to 43%
It is not only that nifty it has been changing color in every second day, In the last two days FMCG stocks have seen a strong price action and a couple of up-grades have also come. There is literally a 360 degree change in the narrative about the sector and its fortune that was being heard . What happens in reality will be known later but this just highlights two things. First a business which has survived for long, there are phases where they are ignored by the street and then make sudden come back, just due to reason that they have size. Second, never write off a good balance sheet. Now the same thing applies to the IT sector, they have been ignored by the street for a good reason, lower growth and business challenges which AI is bringing to table. But the fact is that they also have strong balance sheets and the fact that they cater to demand where the market size is big and is global in nature and have a track record of adapting well to changes.
Expect 13-15% earnings growth in FY-25 driven by topline growth, margin expansion: Venugopal Garre
Remember, we have not even yet seen a rate cycle decline as well, so those are the levers which come through late in the year from a support point of view for macro.
Energy transition, electrification theme to provide big investment opportunity: Nirav Sheth
We need to look forward to the next big critical event which is budget and I believe that that will set the tone for what India needs to do for the next 5-10 years and I believe that you are likely to see a reasonable level of indirect reforms.
After consolidating around current levels, market to deliver healthy returns over 3-5 years: Jitendra Arora
Jitendra Arora of ICICI Prudential discusses market consolidation, challenges in valuations, and investment strategies emphasizing long-term growth over short-term gains. He provides insights on sectors like private banks and real estate for potential investment opportunities. Arora says: "Private bank is one pocket where we find a lot of comfort as a house in terms of the valuations."
Looking for attractive valuation plus strong fundamentals? Financials is the answer, says Ramesh Mantri
Ramesh Mantri, CIO of WhiteOak Capital AMC, discusses the strong fundamentals and high valuations in various sectors, highlighting the attractiveness of financials. He mentions the impact of market rally, government spending, and the potential growth in the insurance and IT sectors. He also says private banks is the ignored part of the market and valuations are below long-term averages, fundamentals are very strong. Here a lot of alpha can be created.
What are the three pockets of opportunities going forward? V Srivatsa explains
V Srivatsa, Fund Manager and Executive V-P at UTI AMC, sees opportunities in private banks, healthcare, and FMCG sectors amidst market volatility and election outcome uncertainties. Srivatsa also says that he is quite positive on is commodities because that has seen a very sharp run-up in the prices which will start reflecting in the coming quarters.
Feroze Azeez on what one should bet on with a 1-year, 3-year and five-year horizon
Feroze Azeez, Deputy CEO of Anand Rathi Wealth Limited, provides insights on market triggers, FII positioning, earnings growth, valuations, investor sentiment, and recommended sectors for investment, including financial services, rail and highways, and renewable energy. Azeez also points out that earnings have doubled in the five-year fiscal, which is a great five-year earning cycle.
2 sectoral bets from Ganeshram Jayaraman for next 2 years
This has led to a very positive capex cycle, likely to start private sector capex cycle. This very good profit growth also led to strong government capex because tax collections were buoyant. So, it was a very strong demand, supply, earnings and valuations cycle.
Valuations of large private banks oblivious to improved earnings outlook: Santanu Chakrabarti, BNP Paribas
Analyst Santanu Chakrabarti from BNP Paribas highlights undervaluation in large private banks despite positive surprises. Despite a strong FY24, largecap private bank stock price performances were mostly muted. The FY26 look-through on earnings growth is expected to be rosier. HDFC Bank is recommended with a target price of Rs 2,470.
ETMarkets Fund Manager Talk: Q4 results in line with expectations, domestic cyclicals leading the way: Shibani Sircar Kurian
The March quarter earnings growth was driven by BFSI, Auto, technology, and oil and gas, with smallcaps rallying on retail liquidity. Shibani Sircar Kurian discussed the risk in the broader market for FY25. Nifty companies reported 13% earnings growth. PSUs are favored pre-elections. Capex in power, defence, and infrastructure is expected to continue.
ETMarkets Fund Manager Talk: PSU banks trading at 40-50% discount to pvt banks, can outperform: Hardick Bora of Union Mutual Fund
Hardick Bora discusses the state of the PSU banks versus the private banks, Nifty 50 Index, Fair Value Spectrum, small and midcap funds, and asset allocation strategy for moderate risk profiles. Bora says: "An election outcome with continuity of the current administration may strengthen the sentiments of local as well foreign investors."
Valuation comfort in capital goods stocks? Stay invested & wait for dips: Renu Baid Pugalia
Renu Baid Pugalia of IIFL Institutional Equities discusses the earnings upgrades for Larsen & Toubro, ABB, and Siemens in the capital goods sector, highlighting the valuation struggles. She also mentions the positive outlook for MNC subsidiaries like Siemens and identifies potential value in companies such as Cummins and Transformers & Rectifiers.
ETMarkets Fund Manager Talk: Valuation of PSU stocks isn't as attractive, says Franklin Templeton’s Akhil Kalluri
Akhil Kalluri, VP at Franklin Templeton, discusses PSU stocks, retail liquidity impact, and broader market valuation risks. He also comments on tech stocks, consumption names, and industrial sectors' performance in the March quarter. Kalluri points out that the aggregate topline & EBITDA growth for Nifty 50 names in 4QFY24 so far are relatively muted, in high single digits.
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