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Economic Times
21-05-2025
- Business
- Economic Times
FII flows turn positive; long-term capital returning to India: Sachin Shah
"Clearly, US corporates are looking at global alternate, supply chains are getting created, and multiple countries whether it is India, Indonesia, Vietnam, South America whichever company or whichever corporates will have their own strengths, they will get their share of business, so that is a mega trend that we are going to witness over the next three, five, seven, ten years and we strongly believe that will continue," says Sachin Shah, Emkay Investment Managers. ADVERTISEMENT Now Moody's upgrade has come in. China has also decided to cut its lending rate and, of course, China and the United States are engaged in a slew of discussions with respect to the trade deal, the interim trade deal that they signed. How do you expect all of this global market action to have an impact on the India market? Sachin Shah: So, the good thing is that the trade war that we were all witnessing for the last few months, the intensity over there seems to be cooling off quite significantly from US with most of the countries, so that is a very positive thing and Indian companies obviously wherever we have a strong value proposition from each of our businesses, this is what I have mentioned a few times even earlier on this show, that wherever we have our strong value propositions whether it is your speciality chemicals, pharmaceuticals, textiles, electronics, manufacturing, engineering, quite a few other industries I do not think there is going to be any challenge over there. Clearly, US corporates are looking at global alternate, supply chains are getting created, and multiple countries whether it is India, Indonesia, Vietnam, South America whichever company or whichever corporates will have their own strengths, they will get their share of business, so that is a mega trend that we are going to witness over the next three, five, seven, ten years and we strongly believe that will continue. So, can we also say we have moved from chaos to clarity because the world is reshuffling and India definitely is standing out. The kind of cues and triggers you just mentioned, the kind of sectors that is going to benefit now, do you think among the emerging market pack India is definitely going to stand out in a couple of quarters' time frame that you just mentioned? Sachin Shah: Well, we definitely believe so and it is not that we will have a share for all the businesses, but at least there are seven or eight sectors where we believe that Indian corporates have the right to win. They have demonstrated that they have the domain expertise. They have demonstrated that they can deliver the scale for the global demand and where they also respect the intellectual property rights. So, whether it is auto ancillaries, speciality chemicals, pharmaceuticals, electronics manufacturing, engineering and within engineering I would say hardcore engineering, power equipments, textiles, so these are few sectors where we believe that Indian corporates, Indian companies have clearly demonstrated the right to win and over the next two-three quarters, we are really standing out in terms of our incremental market share that we are going to gain over the next few years. So, you are suggesting that there is going to be an incremental market share that India is going to corner with respect to the other emerging markets, but is that the view that you hold for FIIs as well and, of course, now that at the moment the India-Pakistan skirmishes, well both sides have agreed for an understanding, a larger understanding, minister Piyush Goyal is also in the United States, but what could be the next big trigger for the Indian markets to sort of have a disproportionate movement. Sachin Shah: So, as far as foreign institutional investors are concerned, the trend is clearly reversed there. Since the month of March, April, and even May we are seeing significant amount of positive flows on a continuous basis and even if you see some of the hardcore data, the selling started sometime in I would say September 24 or October 24, they sold almost worth two lakh plus crores from October till February or March and that was the number that they had bought from January 24 to almost September 24th. ADVERTISEMENT What I am trying to say is that the hot money which had come in probably went out and it got more or less settled and now we are seeing very decent amount of, very-very stable long-term money which is we are getting. (You can now subscribe to our ETMarkets WhatsApp channel)
Time of India
21-05-2025
- Business
- Time of India
FII flows turn positive; long-term capital returning to India: Sachin Shah
"Clearly, US corporates are looking at global alternate, supply chains are getting created, and multiple countries whether it is India, Indonesia, Vietnam, South America whichever company or whichever corporates will have their own strengths, they will get their share of business, so that is a mega trend that we are going to witness over the next three, five, seven, ten years and we strongly believe that will continue," says Sachin Shah , Emkay Investment Managers . Now Moody's upgrade has come in. China has also decided to cut its lending rate and, of course, China and the United States are engaged in a slew of discussions with respect to the trade deal, the interim trade deal that they signed. How do you expect all of this global market action to have an impact on the India market? Sachin Shah: So, the good thing is that the trade war that we were all witnessing for the last few months, the intensity over there seems to be cooling off quite significantly from US with most of the countries, so that is a very positive thing and Indian companies obviously wherever we have a strong value proposition from each of our businesses, this is what I have mentioned a few times even earlier on this show, that wherever we have our strong value propositions whether it is your speciality chemicals, pharmaceuticals, textiles, electronics, manufacturing, engineering, quite a few other industries I do not think there is going to be any challenge over there. Play Video Pause Skip Backward Skip Forward Unmute Current Time 0:00 / Duration 0:00 Loaded : 0% 0:00 Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 1x Playback Rate Chapters Chapters Descriptions descriptions off , selected Captions captions settings , opens captions settings dialog captions off , selected Audio Track Picture-in-Picture Fullscreen This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Text Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Transparent Caption Area Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Drop shadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Moose Approaches Girl At Bus Stop In National Capital Region - Watch What Happens Happy in Shape Undo Clearly, US corporates are looking at global alternate, supply chains are getting created, and multiple countries whether it is India, Indonesia, Vietnam, South America whichever company or whichever corporates will have their own strengths, they will get their share of business, so that is a mega trend that we are going to witness over the next three, five, seven, ten years and we strongly believe that will continue. So, can we also say we have moved from chaos to clarity because the world is reshuffling and India definitely is standing out. The kind of cues and triggers you just mentioned, the kind of sectors that is going to benefit now, do you think among the emerging market pack India is definitely going to stand out in a couple of quarters' time frame that you just mentioned? Sachin Shah: Well, we definitely believe so and it is not that we will have a share for all the businesses, but at least there are seven or eight sectors where we believe that Indian corporates have the right to win. They have demonstrated that they have the domain expertise. They have demonstrated that they can deliver the scale for the global demand and where they also respect the intellectual property rights. So, whether it is auto ancillaries, speciality chemicals, pharmaceuticals, electronics manufacturing, engineering and within engineering I would say hardcore engineering, power equipments, textiles, so these are few sectors where we believe that Indian corporates, Indian companies have clearly demonstrated the right to win and over the next two-three quarters, we are really standing out in terms of our incremental market share that we are going to gain over the next few years. Live Events So, you are suggesting that there is going to be an incremental market share that India is going to corner with respect to the other emerging markets , but is that the view that you hold for FIIs as well and, of course, now that at the moment the India-Pakistan skirmishes, well both sides have agreed for an understanding, a larger understanding, minister Piyush Goyal is also in the United States, but what could be the next big trigger for the Indian markets to sort of have a disproportionate movement. Sachin Shah: So, as far as foreign institutional investors are concerned, the trend is clearly reversed there. Since the month of March, April, and even May we are seeing significant amount of positive flows on a continuous basis and even if you see some of the hardcore data, the selling started sometime in I would say September 24 or October 24, they sold almost worth two lakh plus crores from October till February or March and that was the number that they had bought from January 24 to almost September 24th. What I am trying to say is that the hot money which had come in probably went out and it got more or less settled and now we are seeing very decent amount of, very-very stable long-term money which is we are getting.
Time of India
19-05-2025
- Business
- Time of India
PSU theme to regain spotlight amid earnings strength: Manish Sonthalia
"According to me, the PSU theme will again come back into the limelight, you have a certain pockets of these and, of course, all the PSU names are up from their lows to say the least and that is where I stand as far the PSU pack," says Manish Sonthalia , Emkay Investment Managers . Also, help us with your take and the latest take rather on insurance pack because I know that you will not talk stocks, but if I can name some, then Star Health as a whole is up around 22% just in the week gone by. HDFC Life hitting its 52-week high and even SBI Life seems to be catching up. Very select counters when it comes to the life insurance space. Give us some sense that what is your current take on this particular segment as well as are you still holding your positive stance on this one? Manish Sonthalia: Yes, very positive on both the life insurance and the health insurance space particularly on account of valuations and bulk of the 80C impact because individuals are transitioning from an old regime to a new regime where there is not any deduction available for life insurance. So, given that most of the fear around the life insurance was that life insurance as a product was taken primarily because of tax breaks on 80C, I mean that has now come in the base and you are looking at pure protection as a mechanism for the life insurance companies. Valuations are very-very decent so to speak and broadly you could assume that on a long-term basis if you assume that life insurance or maybe even a health insurance is at the base case or the worst possible situation would be growing at around 15%. Now, whether a 15% growth into the future has got priced in in the current valuation, I would tend to defer. So, from that point of view, the established life insurance names plus the major health insurance names which you took, there is going to be price increase and you are looking at valuations in and around three-time price to book. Of course, there was pain on the underwriting segment and now that has got broadly priced in so to speak and on this current base most of the good health insurance companies, I mean I am alluding to the private ones and not the public sector ones, they would be working towards combined ratio of closer to 95-96% going into the future. Worst of the pessimism in the health insurance names according to me is again priced in. Live Events But let me put the spotlight on these narrative theme stocks. When you talk about the narrative theme, last year you did see that rally come about in the PSU counters be it the power space, be it defence, be it for that matter of fact railways as well, and if I could add to that list QSR space, also saw a lot of excitement when you talk over the last one, one-and-a-half years or so. Do you think they will make a comeback and should now people actually avoid or investors avoid looking at this entire narrative theme and look at select pockets where you have valuation comfort instead? Manish Sonthalia: The psu theme broadly according to me has again seen the worst. The PSU pack as a whole going forward is likely to outperform the markets. Already, a lot of pessimism has got built into it and the last six-nine months has been very damaging for the PSU space as a whole. It is coming back from the lows. Earnings growth broadly are intact for most of the well-known PSU and you have valuations which have got corrected. So, according to me, the PSU theme will again come back into the limelight, you have a certain pockets of these and, of course, all the PSU names are up from their lows to say the least and that is where I stand as far the PSU pack. I was never very bearish on PSU as a space, but now I have been more bullish because the valuations have come up and earnings growth is intact, dividend yields are very good. As far as the QSR space is concerned, this quarter numbers again is a mixed bag. Some of the names particularly the pizza ones have delivered good numbers, but valuations are exorbitant. The burger space, again the numbers have not come in as expected, but still keeping the faith as far as FY27 projections on some of these companies are concerned, the turnover guidance which they have given and even the operating leverage on the margin front should come through. Of course, you cannot really expect a runaway growth because the valuations are slightly on the elevated side, but these are very decent quality businesses where if the earning growth comes through, then broadly I expect that the second half of this year would be better than the first half of this year in the QSR space and broadly if I am bullish on consumption, then this is one space which would stand out, some of the names like your Jubilant or, let us say Zomato which are there in our portfolio, we tend to stick with these guys and believe that they could deliver broadly in the medium to long term. You have spoken about QSR. We have touched upon consumer discretionary. But what is your view when it comes to core FMCG because this time volume growth has been better than expected even though it is nominally better, but still it has been better than expected. Revenue expansion has happened in across the board. What is your take when it comes to core FMCG given that on the fundamental side, we are also expecting a very good monsoon this year and although urban demand has not picked up to the extent we would have liked it to be, it is still now picking up some ground when compared to rural demand. So, what is your take on FMCG now? Manish Sonthalia: The only concerning fact is the valuations vis-à-vis the growth. I mean you cannot expect more than a 10% to 12% sort of a revenue growth and, of course, companies would be vying for the volume growth per se because inflation is going to be very benign. So, it is a pick and choose where growth vis-à-vis valuation has to come into perspective. On a broad basis consumption would tend to get a lift broadly now that the IMD has predicted good monsoons even this year. Rural economy is coming out of the corner from the last two years downturn and these would help at the margin. On the headwind side in the FMCG names, it is going to be your valuations. There is nothing more to basically look into it, it is basically growth and valuations, it will be a pick and choose. ETMarkets WhatsApp channel )
Economic Times
19-05-2025
- Business
- Economic Times
Markets to stay rangebound near-term; big upside likely in H2: Manish Sonthalia
So, wherever there is valuation comfort and most of these names are available at let us say one-time price to book and a decent growth going forward and if you have let us say the bulk of the provisioning or most of the pain getting priced in, then again this is one space which looks quite interesting. "What is supporting the markets, firstly, the markets are very-very light. The retail participation is very anaemic so to speak. You have institutional buying which has come through both on the DII and the FII front. The earning season, Q4 has primarily been better than estimates both on the largecap side as well as the mid and the smallcap side," says Manish Sonthalia, Emkay Investment Managers. I remember the last time we connected on air, you were quite bullish on the markets and you were actually looking for some good opportunities. But now that Nifty has surpassed that level of 25,000, the broader markets are holding up well, tell us how are you looking at the markets right now and how much more headroom do you believe is there for the index to move up if at all? Manish Sonthalia: The big move in the markets is likely to come in the second half of the year. For the next month, month-and-a-half you broadly believe that the markets would be trading within a band of 24 to 26, in a range till at about the point in time when you have clarity on the tariffs, that would broadly be the construct as of now. What is supporting the markets, firstly, the markets are very-very light. The retail participation is very anaemic so to speak. You have institutional buying which has come through both on the DII and the FII front. The earning season, Q4 has primarily been better than estimates both on the largecap side as well as the mid and the smallcap side. There was a lot of apprehension that there is going to be degrowth in the mid and smallcap space, the quarter gone by, but I am afraid that that has not come true and the earnings for the mid and smallcaps have come in better than estimates, that is the main reason why you are seeing broadly buying in the broader markets per se and the flows on the monthly SIPs, etc, have pretty been decent. So, all in all, fundamentals will need to keep just getting justified in Q1 and Q2. Of course, we are looking at rate cuts and so on and so forth but broadly markets on an overall basis rangebound in a 10% band between 24 and 26. Like you said this earnings is one that is actually ruling the sentiment when you talk about the markets in next one to two quarters, we need to see that momentum actually sustain when you talk about the earnings. But are there any select pockets right now that are looking very attractive to you given the fact that yes, we did see the correction, but post that we have seen a very sharp rally, a stellar one at that when you talk about the markets? Are there any pockets right now that are still actually emitting that value that you can go ahead and look to invest in because I am sure a lot of FOMO effect has already kicked in. Manish Sonthalia: So, when the markets were at 22,000, it as a space was looking very-very well valued or very decently valued, very benign in terms of valuation given that now you have some sort of a clarity coming out of the major issues on tariffs with China and the chances of a US recession has come down from around 75% to something like a 40% probability of a recession. So, at the margin it would be outperforming in the last two-three months, that is one. Secondly, Operation Sindoor has given a lot of fillip to the defence names. I would primarily be going on where this additional 40,000 crores worth of orders are likely to come through. This is going to be broadly in the area of artillery, guns, missile programmes where electronics, etc, would be a part. So, these would be some of the areas which at the margin look pretty decent. Staples, we need to watch out for the second half of the year numbers when this whole consumption space looks good. BFSI, particularly insurance, health insurance, life insurance, of course, nothing much to read into the monthly life insurance numbers are very-very low, but on a valuation front from the next one- to two-year point of view again, this is one space looks good. Pharma has not got dented much, again it looks a good story for the next one to two years, particularly the CDMO space and that is where the entire focus would be currently according to us. Last time we interacted with you, you believe that the entire banking and financial space looked like it had more value to offer. Given the kind of numbers we have seen in quarter four, it has been a good quarter four coming in for banking and financials. Over the year as well, on year-to- date basis these are the top two sectors that have been gaining. Now, do you believe that there is still some value in this sector? In terms of the valuations, do you believe they are justified or do you believe that there is some more run-up left over here? Manish Sonthalia: So, ever since the second quarter of FY25 when the MFI issue came to light, of course, it was very clear that the next two to three quarters there is going to be elevated provisions, particularly in the MFI space and the retail space, that is getting manifested in terms of provisions that you are looking forward to in the midcap banking names, we got to watch out how this whole provisioning plays out. But the largecap names both in the public and private sector space are better poised at this given juncture. But at the same time, I would believe that there is definitely value emerging even in the MFI space because a lot of provisioning has already happened and particularly the stocks have also priced in most of the negative. So, wherever there is valuation comfort and most of these names are available at let us say one-time price to book and a decent growth going forward and if you have let us say the bulk of the provisioning or most of the pain getting priced in, then again this is one space which looks quite interesting.
