Latest news with #AmnishAggarwal
Economic Times
6 days ago
- Business
- Economic Times
What's there in store for metal stocks? Amnish Aggarwal explains
Live Events You Might Also Like: Amnish Aggarwal on where to find value in capital market theme (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel , Head-Research,, discusses the metal sector rally, noting raw material gains drove profits. Volume growth is crucial for further gains. Safeguard duties offer price support. MNCs are diluting stakes in Indian ventures due to valuation differences. Commitment levels and technology dependence are key factors. Stake reductions below 51% may signal reduced interest. The impact varies by company and metal stocks have already seen a rally and if you look at the numbers, the volumes in all the metal stocks have not been that encouraging for most of the companies. The margins have been there mainly because raw material prices have been benign. So, it is not the product pricing, but it is the raw material gains which have given them incremental profits and that is very well reflected in the stock prices because the stock prices have moved up by anywhere between 20% to 30% in the past two-three incrementally, the volume growth has to pick up. Safeguard duty is responsible for giving some hopes that the prices will be sustained and the profitability will remain healthy. If the profitability remains healthy, we will not see any big cut happening in the stock prices of all the metal companies. But incrementally, from here on, the returns should be more moderate than what we have seen particularly in the last month or have to look at this on a case-to-case basis because many of these companies or MNCs today are holding stocks not because they had come in very willingly or something, but because the government regulations at that point of time permitted them to hold. Today, in many of these large MNCs, the kind of valuations which are there in India whether you look at say some of these durable companies like LG Electronics or even Hindustan Unilever or others, the market cap seems to be disproportionately higher in terms of valuations because the Indian companies trade at a significant premium to where their MNC parents are trading today at. That is prompting some of these MNC parents to dilute some holding over there and reallocate their resources elsewhere globally where they see more growth or do some buybacks and things like as far as growth is concerned, it depends upon how much commitment is there. For example, if there is some MNC parent which reduces a stake to say 15%, 20%, then they are gradually losing interest in that particular company and it also depends on the business of the company that how much that business is technologically or otherwise dependent upon the MNC parent. In many of the sectors where the companies need to get a continuous flow of technology from the parent, reduction of the stake below say a level of 51% in certain cases, I think that I would see that as some of the companies which you showed in the chart, particularly some of these MNCs which are in the capital goods sectors like your ABB Siemens and many of these names, there the stakes are anywhere between say 51% to 75%, a couple of them I think maybe GE Vernova has also cut down stake below 51, although the company is growing technically speaking, any company reducing the stake below 51% is not a very welcome signal because then you are not the majority holder of that company and in the longer term where your strategies are going to be, slightly difficult to say and that is how I would read and rest it all depends upon how much and what type of company it is, what type of technology transfer happens and how critical are the operations of the domestic entity for its parent.
Time of India
6 days ago
- Business
- Time of India
What's there in store for metal stocks? Amnish Aggarwal explains
Tired of too many ads? Remove Ads Also Read: Amnish Aggarwal on where to find value in capital market theme Tired of too many ads? Remove Ads , Head-Research,, discusses the metal sector rally, noting raw material gains drove profits. Volume growth is crucial for further gains. Safeguard duties offer price support. MNCs are diluting stakes in Indian ventures due to valuation differences. Commitment levels and technology dependence are key factors. Stake reductions below 51% may signal reduced interest. The impact varies by company and metal stocks have already seen a rally and if you look at the numbers, the volumes in all the metal stocks have not been that encouraging for most of the companies. The margins have been there mainly because raw material prices have been benign. So, it is not the product pricing, but it is the raw material gains which have given them incremental profits and that is very well reflected in the stock prices because the stock prices have moved up by anywhere between 20% to 30% in the past two-three incrementally, the volume growth has to pick up. Safeguard duty is responsible for giving some hopes that the prices will be sustained and the profitability will remain healthy. If the profitability remains healthy, we will not see any big cut happening in the stock prices of all the metal companies. But incrementally, from here on, the returns should be more moderate than what we have seen particularly in the last month or have to look at this on a case-to-case basis because many of these companies or MNCs today are holding stocks not because they had come in very willingly or something, but because the government regulations at that point of time permitted them to hold. Today, in many of these large MNCs, the kind of valuations which are there in India whether you look at say some of these durable companies like LG Electronics or even Hindustan Unilever or others, the market cap seems to be disproportionately higher in terms of valuations because the Indian companies trade at a significant premium to where their MNC parents are trading today at. That is prompting some of these MNC parents to dilute some holding over there and reallocate their resources elsewhere globally where they see more growth or do some buybacks and things like as far as growth is concerned, it depends upon how much commitment is there. For example, if there is some MNC parent which reduces a stake to say 15%, 20%, then they are gradually losing interest in that particular company and it also depends on the business of the company that how much that business is technologically or otherwise dependent upon the MNC parent. In many of the sectors where the companies need to get a continuous flow of technology from the parent, reduction of the stake below say a level of 51% in certain cases, I think that I would see that as some of the companies which you showed in the chart, particularly some of these MNCs which are in the capital goods sectors like your ABB Siemens and many of these names, there the stakes are anywhere between say 51% to 75%, a couple of them I think maybe GE Vernova has also cut down stake below 51, although the company is growing technically speaking, any company reducing the stake below 51% is not a very welcome signal because then you are not the majority holder of that company and in the longer term where your strategies are going to be, slightly difficult to say and that is how I would read and rest it all depends upon how much and what type of company it is, what type of technology transfer happens and how critical are the operations of the domestic entity for its parent.
Time of India
6 days ago
- Business
- Time of India
Amnish Aggarwal on where to find value in capital market theme
Amnish Aggarwal , Head-Research, Prabhudas Lilladher , says BSE's potential boost from NSE's listing makes it attractive. Capital market themes like AMCs and wealth companies offer steady returns, though significant re-rating is unlikely. Life insurance shows strong numbers and momentum, contrasting with slower growth in non-life. Within the stock market, what is looking good at these levels? BSE is still not looking overbought. So, where do you find value on the table in the entire capital markets theme? Amnish Aggarwal: BSE numbers have been reasonably good, but there are also expectations of NSE, which is the bigger exchange, getting listed. Once listed, NSE should command a reasonably good premium and PE multiples given the kind of number, scale it has got. But more importantly, going by technical factors, once NSE gets listed, I believe it is going to have Rs 4-5 lakh crore or more market cap and it will be listed only on BSE because NSE shares cannot be listed on its own exchange. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Elegant New Scooters For Seniors In 2024: The Prices May Surprise You Mobility Scooter | Search Ads Learn More Now, once that bigger stock comes and it is in F&O, in indices and everywhere, the BSE volumes per se will get a boost significantly by the NSE listing . So that is one. Now, as far as value is concerned, till the time we get some listing from the NSE, BSE will continue to attract investors. But looking at the broader capital market themes which will include AMCs, which will include wealth companies, and broking, the markets have been good. The number of investors in the Indian markets has been going up and barring the correction which comes in from time to time, whether it is the wealth space or AMCs, this space can give very secular returns from here on. But if we look at the value of the last couple of years, will any significant re-rating happen in many of these companies including some of the service providers like CAMS? I think many of the stocks are already trading at 30 times, 40 times. So, while a significant re-rating might not happen, many of these stocks still provide a decent opportunity to make secure gains from here on. Will the same apply to CAMS, MCX and other financial intermediaries also? Amnish Aggarwal: Yes, that is what I am saying. A BSE or NSE is a very different case altogether, but when it comes to others which includes AMCs, which, even CAMS and all, they have now reached the stage where there would be more secular returns because the re-rating potential in terms of PE is very limited. Live Events You Might Also Like: Markets likely to trend and hit new highs in H2; 3 themes to deliver multi-year returns: Nitin Raheja Is there merit in revisiting insurance stocks, both life and as well as non-life because stocks like HDFC have come at a 52- week high. Suddenly, Star Healthcare, which is health insurance, is up 40-50% from the lows. LIC had a field day yesterday. Is the entire insurance space looking bombed out and is there value in it now? Amnish Aggarwal: One has to bifurcate them into two parts. If you look at life insurance companies, whether it is HDFC Life or LIC or even Max, all have reported strong numbers. They seem to be looking pretty decent and that is also getting amply reflected in the way the stock prices are behaving. When it comes to the non-life insurers, particularly the ones which are health insurance companies or companies catering to segments like vehicles and other insurances, the scenario is slightly different if you look at the recent numbers of Star Health or ICICI Lombard. That sort of growth is not visible there. In the last 4-6 months, life insurance has started taking the centre stage. In the last two to three years, there was a long consolidation happening in the life insurance industry and the stocks were moving in the same range for quite some time. Now with the growth revival, they have done well. As of now, life insurance companies in particular have been doing far better and the momentum seems to be on their side. As far as non-life is concerned, we might see some action over there, but as of now the numbers and the trajectory does not suggest that. So, how far are we away from this word value for IT? Companies have no debt. Return on equity is decent. Buyback is happening. Cash flows are still there. Rather than buying defence stocks or consumer stocks at 70-80 PE multiple, isn't it better to buy it at PE multiples of 17-18? Consumer companies are growing at 2-3%. PE multiples are 50 times. IT companies are growing at 7% to 8%, PE multiples are in the mid-teens or early 20s. Amnish Aggarwal: You can look at them on a relative basis because definitely consumer companies are growing much slower, their PE multiples are higher, but IT services if you look at say recent past, it is a typical value trap kind of a situation. You just strip out a few years in between when they got some booster and they grew faster, otherwise the secular growth in some of these companies has not been that great. You Might Also Like: ETMarkets PMS Talk: PIPE and value strategies delivered 30–37% CAGR over 5 years - Anand Shah reveals growth drivers One can argue that the PE multiples have corrected more than what they traded in 2022 because after the first wave of COVID everyone thought that work from home is a new normal, their costs have permanently come down, the margins are going to improve. But even Infosys, TCS started work from office and everyone's multiples got re-rated by 30% to 40% which have now been corrected over a period of time. As of now, I see very little scope for any big surprise in terms of numbers because the global turmoil seems to be there both on the tariff side as well as on the growth side. The dividend yields or in the stocks the PE multiples are low. In terms of visibility and overall setup, I want to go for pure growth, then I would not be much keen on many of these IT names. I agree that some of the defence stocks or some of the consumer stocks are definitely expensive, but they are pure contra value stories. Whether they will start growing again and get re-rated is something which I am not very confident about.
Economic Times
07-05-2025
- Business
- Economic Times
Geopolitical tensions may fuel market volatility in short term: Amnish Aggarwal
"Now, it all depends upon to what extent this escalates. If Pakistan also retaliates and there is some escalation, then we could see markets turning much more volatile at least in the coming few days," says Amnish Aggarwal, Prabhudas Lilladher. ADVERTISEMENT What are you suspecting? Do you think the markets are going to be a little volatile with regards to all the news flow from operation Sindoor or do you think it is going to be at best just rangebound given that this is a news that we all knew and anticipated coming? Amnish Aggarwal: So, the initial reaction which you showed of the market 60 points down, this is not fully capturing that how the things are set up today. You see, it is not only the question of your operation Sindoor, but the news which I looked at that there is a heavy artillery firing which is going on across the border. Now, it all depends upon to what extent this escalates. If Pakistan also retaliates and there is some escalation, then we could see markets turning much more volatile at least in the coming few days. Especially given the disconnect that one is seeing right now with what is happening in the broader end of the market and what is happening at an index level, I mean if I were to just dissect what was happening in the markets yesterday, acute weakness in mid and smallcaps, the Nifty being held out with some of the leadership names, you had a Bharti, M&M, and a few others hold out and then banks have been underperforming ever since you had Kotak and SBI delivered their numbers. Tell me where do you think the sectoral composition in the market is going to head and let us first talk about largecaps. Amnish Aggarwal: If you look few months ago what had happened was that the largecaps actually they saw a lot of FII selling and whenever we see FII selling, the selling usually is concentrated a bit in the top say 20, 25, or say 50 stocks. But subsequently due to the weight even the midcaps came down and what has happened in the last month-and-a-half in a very gist of it the Indian market was perhaps the most oversold or it was heavily sold by FIIs in the last six months and after the Trump tariff uncertainty around the world and then we saw the markets actually stabilising and largecaps moved. Now, in the current situation everyone knows that the interest rates are going to come down, the next year's profitability of banks is not going to be anything great, and there has been a rally of say 15% to 20% in many of these bank stocks, so it is a typical sectoral rotation and the breather which is coming in at this point of time. ADVERTISEMENT So, in the near term, there could be some space for defensives, now whether you call some of these pharma names, hospital names, defence stocks could be something to watch out for. So, defensives could gain some ground in this kind of an environment where there is uncertainty regarding war and all and banks, some of the other, so they can take little bit of breather or backseat as of now. ADVERTISEMENT I wanted to get your take on some of these wires and cable companies because we have the numbers coming in from Polycab, the numbers look quite strong given the fact that the competition is seen to be intensifying in the whole sector. Just yesterday the stock was up 2%, but we also have KEI Industries, a strong set indeed, but what has been your reading on both these numbers and given the competitive intensity inching up do you believe that maybe it is a time to once again look out for some of those companies which are already in the business for some more time now? Amnish Aggarwal: Wire and cable companies actually if you look at say Polycab although there export business it was under a bit of pressure because some contracts they got rolled over to next quarter, but overall the numbers have been pretty decent for all these companies and it has been both on the wire as well as on the cable side. Now, if you look at say Polycab, maybe say three months back till the news of UltraTech entering the segment and even Adani Group entering the segment was there, the stock was trading at something like 40-45 times, 50 times, and post that the stock corrected significantly. The valuations today are much more supportive. ADVERTISEMENT It is trading around 30 odd times on FY27, which today is much more affordable than it used to be. Now what competition will do, only time will tell. It might get reflected in a year or two years down the line, not on an immediate basis and that too it can first come in a wire segment because it is more like a B2C. In case of cable you need certifications, you need approvals which takes a pretty-pretty long period of time. So, stocks going to earlier multiples of 45 times, 50 times that is not going to be the case because people have experienced particularly in the paint segment that when a large player tends to enter the segment, there could be disruption. So, those PE multiples might not come, but because the PE multiples have become more reasonable, there is a probability of making reasonable returns from the current levels and currently, we are preferring KEI over Polycab. ADVERTISEMENT I have a slightly more optimistic view which is that in last 8-10 days Indian markets did not align with global markets. While directionally we were up, we were underperforming, and this has happened at a time when banking numbers have been strong, crude has been down, flows have been strong because everyone in a sense was worried, concerned, jittery, or nervous about the geopolitical attack or geopolitical tensions. If there is no escalation in next 24 hours and 48 hours in terms of the geopolitical tensions, do you think that could act as a trigger for the market and markets could see a big relief rally of 2-3% or even 5%. Amnish Aggarwal: That is you can say some sort of a likelihood which can be there that if there is no reaction at all or a reaction like say what happened in case of say Israel and Iran a few months back. If there is a muted reaction or no reaction, then definitely I would say things will settle and the market can actually look at some sort of an upward movement. But my own sense is that to expect that there will not be any reaction to happen, at this point of time I will not expect market or the people particularly who trade to build up any position expecting that there would not be any reaction. But if there is no reaction or the things settle in the next couple of days, two-three days, then that would be a big positive for the markets. Bharti is not getting its due, it is almost at 2000, we rarely talk about it. Markets is obsessed with banks. We spend a lot of time discussing it. We do a lot of prep time in understanding the business model of PB Fintech and Paytm. But Bharti Rs 2000, who would have thought that. Amnish Aggarwal: I have been saying this one line that telecom is the best consumer stock. Today telecom is centre of everything whether it is a common man, whether it is financial, defence, everywhere, you cannot work without telecom and this is going to be the future. So, telecom companies you can play only through either it is Bharti or through Reliance and these stocks particularly on the telecom side will continue to do well. We will continue to see them giving good double digit growth rates even for the next two-three years at least. But where I got to the telecom space I must admit I thought that they cannot be consumer companies because they keep on investing into technology, 4G, 5G. I mean, irrespective of the competition, my view was that look this is a business which will always need capex because you will always need higher data, you will always need more data, you will always need to put those wires, you will always need money to put up those poles. So, the capex is something which in a sense according to me was a concern, but yes, I was conservative and you are right on that. What do you say to capex? Amnish Aggarwal: It is a capital-intensive industry because the technological upgradation continues to happen over there. There is absolutely no doubt about it. But having said that the kind of times we are today living in, the need or the necessity of connectivity, the way it has changed the lives of a common man, the way it has got penetrated and the impact it can have on the overall spectrum that is far-far bigger. Yes, you cannot match a cash flow of say Hindustan Unilever or any other FMCG stock with these telecom companies. But if you look at the longevity of where it goes from here, today the entry barriers they are extremely high. So, for example, in FMCG today you are looking at B2C companies. Every company coming, going on an Amazon or a Flipkart or anywhere trying to sell their product. Can you get any more telecom companies easily into the system and they can disrupt the business so easily, I think that is not there. So, despite therefore capex being high, the kind of necessity it has emerged over the past at least 10 years or so ever since the data usage has increased, this is a sector which is going to stay there.
Time of India
07-05-2025
- Business
- Time of India
Geopolitical tensions may fuel market volatility in short term: Amnish Aggarwal
So, despite therefore capex being high, the kind of necessity it has emerged over the past at least 10 years or so ever since the data usage has increased, this is a sector which is going to stay there. If you look few months ago what had happened was that the largecaps actually they saw a lot of FII selling and whenever we see FII selling, the selling usually is concentrated a bit in the top say 20, 25, or say 50 stocks. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads "Now, it all depends upon to what extent this escalates. If Pakistan also retaliates and there is some escalation, then we could see markets turning much more volatile at least in the coming few days," says Amnish Aggarwal So, the initial reaction which you showed of the market 60 points down, this is not fully capturing that how the things are set up today. You see, it is not only the question of your operation Sindoor, but the news which I looked at that there is a heavy artillery firing which is going on across the border. Now, it all depends upon to what extent this escalates. If Pakistan also retaliates and there is some escalation, then we could see markets turning much more volatile at least in the coming few you look few months ago what had happened was that the largecaps actually they saw a lot of FII selling and whenever we see FII selling, the selling usually is concentrated a bit in the top say 20, 25, or say 50 subsequently due to the weight even the midcaps came down and what has happened in the last month-and-a-half in a very gist of it the Indian market was perhaps the most oversold or it was heavily sold by FIIs in the last six months and after the Trump tariff uncertainty around the world and then we saw the markets actually stabilising and largecaps in the current situation everyone knows that the interest rates are going to come down, the next year's profitability of banks is not going to be anything great, and there has been a rally of say 15% to 20% in many of these bank stocks, so it is a typical sectoral rotation and the breather which is coming in at this point of in the near term, there could be some space for defensives, now whether you call some of these pharma names, hospital names, defence stocks could be something to watch out for. So, defensives could gain some ground in this kind of an environment where there is uncertainty regarding war and all and banks, some of the other, so they can take little bit of breather or backseat as of and cable companies actually if you look at say Polycab although there export business it was under a bit of pressure because some contracts they got rolled over to next quarter, but overall the numbers have been pretty decent for all these companies and it has been both on the wire as well as on the cable if you look at say Polycab, maybe say three months back till the news of UltraTech entering the segment and even Adani Group entering the segment was there, the stock was trading at something like 40-45 times, 50 times, and post that the stock corrected significantly. The valuations today are much more is trading around 30 odd times on FY27, which today is much more affordable than it used to be. Now what competition will do, only time will tell. It might get reflected in a year or two years down the line, not on an immediate basis and that too it can first come in a wire segment because it is more like a case of cable you need certifications, you need approvals which takes a pretty-pretty long period of time. So, stocks going to earlier multiples of 45 times, 50 times that is not going to be the case because people have experienced particularly in the paint segment that when a large player tends to enter the segment, there could be those PE multiples might not come, but because the PE multiples have become more reasonable, there is a probability of making reasonable returns from the current levels and currently, we are preferring KEI over is you can say some sort of a likelihood which can be there that if there is no reaction at all or a reaction like say what happened in case of say Israel and Iran a few months back. If there is a muted reaction or no reaction, then definitely I would say things will settle and the market can actually look at some sort of an upward movement. But my own sense is that to expect that there will not be any reaction to happen, at this point of time I will not expect market or the people particularly who trade to build up any position expecting that there would not be any reaction. But if there is no reaction or the things settle in the next couple of days, two-three days, then that would be a big positive for the markets.I have been saying this one line that telecom is the best consumer stock. Today telecom is centre of everything whether it is a common man, whether it is financial, defence, everywhere, you cannot work without telecom and this is going to be the telecom companies you can play only through either it is Bharti or through Reliance and these stocks particularly on the telecom side will continue to do well. We will continue to see them giving good double digit growth rates even for the next two-three years at is a capital-intensive industry because the technological upgradation continues to happen over there. There is absolutely no doubt about it. But having said that the kind of times we are today living in, the need or the necessity of connectivity, the way it has changed the lives of a common man, the way it has got penetrated and the impact it can have on the overall spectrum that is far-far you cannot match a cash flow of say Hindustan Unilever or any other FMCG stock with these telecom companies. But if you look at the longevity of where it goes from here, today the entry barriers they are extremely high. So, for example, in FMCG today you are looking at B2C companies. Every company coming, going on an Amazon or a Flipkart or anywhere trying to sell their product. Can you get any more telecom companies easily into the system and they can disrupt the business so easily, I think that is not despite therefore capex being high, the kind of necessity it has emerged over the past at least 10 years or so ever since the data usage has increased, this is a sector which is going to stay there.
