Nischal Maheshwari on 2 sectors where we may see rays of hope in market

Time of India

15 hours ago

Nischal Maheshwari
, Market Expert, says FMCG and cement sectors are set to experience better volumes. Cement may also see price increases. Banking, Financial Services and Insurance sector growth will be slow. The IT sector is expected to remain weak. The second quarter will likely be uneventful for the IT sector.
It is a brand new week. Of course, the markets are waiting for clarity on what happens to the tariff with respect to the India-US deal and along with that the earning season will also be in full throttle this particular week. How are you sensing the markets right now? Which factors are at play because of late, we are seeing a bit of a weakness on the index front?
Nischal Maheshwari:
Yes, these are the two big factors which are going to play out. There has been some amount of haziness as far as the tariffs are concerned. Most of us were expecting something to come in the last week, but not much news on that front. But I am pretty hopeful given that around more than 15 countries have already received a letter and India is not one of them. So, definitely there is something on the cards and that is a positive for the market.
But I am really worried about the earnings in the coming quarter. Most of the analysts and my estimate is also 3-4% growth as far as earnings are concerned. For the full year also, we are looking at around 8-9%. The second half of the year is going to be much better. That is a worry and that is why we are seeing some profit taking happening in the market.
Are you seeing any sectors emerging as winners in the trading setup that we have seen over the last week because we have seen sectoral churn. Last week, it was all about FMCG, but that was also on the back of news flow and some heavy lifting done by only a couple of stocks. Where do you believe we could see some rays of hope in the market?
Nischal Maheshwari:
There are a couple of sectors where we are going to see some volume improvements. FMCG is one of them and this may be the turning point for FMCG as far as volumes are concerned. I am not very sure about whether it is going to be followed up with the pricing also. Definitely volumes are going to be better and going ahead also I continue to believe there is going to be better volume growth as far as FMCG is concerned.
Cement is another sector where the volumes were pretty good last quarter and now this quarter again, we are going to see both volumes as well as pricing improvement happening. These are the two sectors where I see some improvement and a positive outlook in the current quarter. BFSI, which is the large sector, is going to remain muted. We have seen credit growth around 9-9.5% and that is not going to be very significant for this quarter as far as BFSI, IT, or energy is concerned.
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What is your take on the IT pack given the disappointing numbers from TCS. The stock performance on Friday reflected that. How do you believe the IT numbers for the largecap IT names could look like for this earning season?
Nischal Maheshwari:
It would be something similar to what TCS has done minus 1-2, maybe whatever plus one as far as the largecap companies are concerned. But within the IT space, we have to look for the midcaps. There you might still look at a 10-12% growth. So, mid- teens growth can still happen with some of the
midcap companies
. But overall, it is going to be under pressure. We have still not seen demand coming back strongly in the US and till this tariff issue gets out of the way. I do not think there is going to be a fresh commitment of any capex across the world. We have to wait for a couple of more quarters or at least for one more quarter before we are going to start seeing some demand coming back. So, the second quarter also is going to be a wash-out for IT.
What is your take on the whole chemical pack?
BASF
earnings show a decline in the top line of 2.1% in their Q2 2025 earnings and not just that, there is a guidance cut as well as the company is saying that the EBITDA before special item is expected between 7.3 billion to 7.7 billion versus the guidance that the company has given earlier. How do you see this impacting the chemical space and some of the Indian players as well?
Nischal Maheshwari:
As you have said, it is a very large company and they are spread across various subsectors within the chemical industry. It will not be right to say that BASF will put out a margin guidance, then there is a pressure across the whole spectrum. There would be certain parts of the chemical sector, basically the specialty part which continues to do well.
In domestic parlance, agrochemicals seem to be on a very good wicket because of a good monsoon that we are seeing right now and the demand remains to be very good. But if I look at the whole chemical sector, two things are coming out very clearly. One is China-led pressure on the pricing front has now more or less diluted because the inventories which were there in China have totally got absorbed in the market in the last two quarters or three quarters.
Now that dumping is not there and we have started seeing volumes pick up across most sectors as far as chemicals are concerned. So, these are the two guiding things which I see as positive. Yes, margins in certain sectors may be under pressure because demand has still not come back to the pre-COVID levels, but I see a positive outlook as far as the chemical sector is concerned.
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