Latest news with #JaiprakashToshniwal
Economic Times
4 days ago
- Business
- Economic Times
Internet sector can grow at double or triple the nominal GDP growth rate: Pankaj Murarka
Live Events You Might Also Like: Jaiprakash Toshniwal sees value in 3 segments; goes contra on IT & specialized capital goods (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel , CIO,, says tariffs may not significantly hinder the overall economy. While consumption will be insulated due to domestic focus, economic momentum is slowing post-Covid. Moderate growth and slower earnings are present. High growth exists in specific market areas. The internet sector shows 25-30% growth. Some internet companies can sustain growth at double or triple the nominal GDP growth For the time being, it looks like some of this bad news is in the price. Directionally, we are still very much in a bull market. I see any fall as a correction in the larger bull market. I still think that the index can do about 12-13% CAGR returns this year and probably over the next two to three that context, probably first quarter numbers have been pretty much okay. The good thing is that we have arrested the earnings downgrade cycle and now incrementally earnings have stabilised. Hopefully from the second half of the year, we should see improvement in earnings going ahead. A fair bit of monetary and fiscal stimulus has been injected into the economy in the budget through tax cuts and then by RBI with a front loading of 50 basis points rate cut. Combining all of that, I am looking forward to a much better economy in the second half of the year and an uplift in earnings growth . I would think that the market should find a floor somewhere around these levels over the next few but before that let me just put the aggregate picture in play. Last year, we had probably one of the slowest earnings growth. In the last five years, post Covid at 5% for Nifty 50 index and the earnings growth for top 200 companies was not very different at about 7 odd percent. So, it was probably one of the slowest earnings growth in the last five we will see some improvement in earnings this year, I must concede that earnings growth this year will not be very significant. If we can do a low double digit, around 10% growth on the Nifty index for Nifty index companies, that will not be a bad outcome. Probably next year is when we get into mid-teens kind of earnings growth. So, it will be a gradual recovery cycle both on the economy and earnings, and that is the one point I wanted to you are right that there is a skew in terms of earnings. I still think that financials are coming off a low base and given that the margins have been impacted in the first quarter and probably the first half because of the front load rate cuts by the RBI, in the second half of the year we probably would see earnings recovery in financials and so that should lead.I agree with you that we are probably coming out of almost two-and-a-half years of consumer slowdown, and so probably in the second half of the year, we should see an improvement in earnings trajectory for consumers as well.: Yes, it is a pretty unwelcome move in terms of the tariffs that we will end up facing. But I still think that those are transitory and eventually these are all bargaining tactics. Eventually India and the US will have a deal in place. Now whether that happens in 8 weeks or 12 is anybody's guess. I still think that the long-term effective tariffs on India will be much lower than what it has been proposed. Having said that, tariffs will have some impact especially on highly export dependent sectors like textiles, gems and jewelleries and few the aggregate growth basis, I still think the aggregate negative headwind that will emerge from tariffs for the economy is still moderate and manageable. Probably a 30-40 basis points hit on the aggregate GDP and despite tariff headwinds, India can still do a 6.2-6.3% growth this year which is similar to what we did last year at 6.5%.At the aggregate level, I still think tariffs are not a big headwind for the economy as a whole. Yes, consumption will be one of those pockets given that complete domestic orientation will remain insulated from it. All of us have to consider that there is a downward reset in terms of economic momentum from what we saw post Covid. So in an environment where economic growth is moderate and earnings have slowed down, high growth can be seen in some pockets of markets. My favourite sector is the internet sector and that is the sector where we are seeing growth still at 25-30% and many companies in that sector can sustain growth which can be 2x or 3x of the underlying nominal GDP growth. So, it probably remains one of my preferred places to find high growth companies in an economy and market where there is an earnings slowdown.
Time of India
5 days ago
- Business
- Time of India
Jaiprakash Toshniwal sees value in 3 segments; goes contra on IT & specialized capital goods
Jaiprakash Toshniwal , Fund Manager, LIC Mutual Fund Asset , says certain sectors currently offer better earning growth than nominal GDP growth. Pharma and chemical sectors, especially specialty chemicals, show positive valuation and growth. IT and specialized capital goods segments on the other hand, present contra call opportunities. These sectors are expected to yield value from a medium to long-term perspective. Investment houses are considering funds focused on IT and capital goods. Since you are a fund manager, let us begin by looking at value in the markets right now. What is your strategy on the value front? How does the marketplace seem in terms of value- based sectors? Jaiprakash Toshniwal: In terms of value in the market, currently there are certain pockets of the sectors where the earning growth is much higher than the nominal GDP growth and that is where the valuations are reasonable in terms of growth. In some of these sectors like pharma and chemical, we are very positive in terms of valuation and we are also seeing growth, especially in specialty chemicals. So, these are the three sectors where I see value emerging from a medium to long-term perspective. Productivity Tool Zero to Hero in Microsoft Excel: Complete Excel guide By Metla Sudha Sekhar View Program Finance Introduction to Technical Analysis & Candlestick Theory By Dinesh Nagpal View Program Finance Financial Literacy i e Lets Crack the Billionaire Code By CA Rahul Gupta View Program Digital Marketing Digital Marketing Masterclass by Neil Patel By Neil Patel View Program Finance Technical Analysis Demystified- A Complete Guide to Trading By Kunal Patel View Program Productivity Tool Excel Essentials to Expert: Your Complete Guide By Study at home View Program Artificial Intelligence AI For Business Professionals Batch 2 By Ansh Mehra View Program What is your perspective on tariff concerns? August 7 is the new deadline. In that context, how should one bet in the market? Jaiprakash Toshniwal: Yes, on the tariff side, August 7 is a deadline and what we have seen in terms of this 25% tariff is already there now but a large part of the tariff, almost 40% is basically India export to the US through specialised electronics as well as pharmaceuticals where no tariff has been announced yet. So, to that extent, the concern simmers down. Having said that, some of the exposures which are very much focused on US exports are basically gems and jewellery and textiles. Those are the most impacted sectors and at this point of time, when we see the numbers compared to the other south Asian countries, the tariff in India is very high. So, to that extent, there would be an impact on the market opportunity for Indian companies in these two sectors. If someone is willing to park funds and build a portfolio, what should be the strategy at this point in time? Which sectors will be insulated from the news events which will come later and at the same time, what is your view on the specialty chemical space and how are you eyeing the earning season because the first half of the earning season was weak, but the second half is still giving us a few hopes? Jaiprakash Toshniwal: It is very hard to say where to allocate and where not to allocate now because February and April onwards the world order has been very different in terms of war and different terms of tariffs. At this point of time it is okay to say that a diversified portfolio is a good approach for investors in India and historically also, we have seen that our earnings growth is in line with the nominal GDP growth rate and investors have made a reasonable amount of wealth from investing in a diversified portfolio approach. Live Events You Might Also Like: In healthcare, betting on these 4 segments; FMCG could be a tactical play: Mihir Vora Having said that, going ahead, we are seeing that on the earning side, the nominal GDP deflator is lower because of lower inflation. The nominal GDP is settling at 9% level and in Q1 also, whatever numbers we have seen on the headline indices, is between 6% and 8% depending on which indices you take. So, to sum it up, earning growth is reasonable across sectors if you want to focus on the medium-term, one should probably avoid auto and auto ancillaries but there is a certain value emerging in pharma, specialty chemicals and capital market companies. All these segments look good. The agrochemical sector looks good because that sector is now coming out of the cyclical bottom of the last two years. All these sectors look interesting at this point of time and as a portfolio manager of an investment house, we are all positive on these few sectors which I mentioned. Specialty chemicals is a very specialised segment and there the companies have to be evaluated on a company specific and chemical side specific manner. I want to highlight one data point that for most specialty chemical companies, the balance sheet became so strong in the last four-five years, that they can invest almost Rs 1,000 crore capex on a cumulative basis on a specific name. This Rs 1,000 crore is a very reasonable number to expand capacity and to cater to the market globally and not only the US market. So far we are talking about long-term strategies. But if someone wants to make the most out of this volatility, is there any contrarian bet that you are focusing on or is there any specific concentration in any theme or sector or type of companies? Jaiprakash Toshniwal: Two sectors to stand out if one has to take contra call. We as a house are also taking in some of the funds which are predominantly in the IT sector as well as the capital goods or a specialised capital goods segment. IT sector valuations are very reasonable. We are worried about the earnings growth but the Q1 numbers show that most of these companies made deal wins recently. As the macro turnout happens in the US, at least on the US side, the BFSI segment is doing good as well as the high-tech and healthcare segments. The other manufacturing segment is not that great. Once that picks up and there is a macro tailwind story in the US, the IT sector should do well and in IT, the sub-segment ER&D segment also has a reasonable green shoot because of the EU and US deal because most of our IT R&D companies are exposed to European auto OEMs and as European relationship improves in terms of the tariff side, we see auto OEMs started spending in the Europe market and that is a positive for ER&D space. You Might Also Like: After a global recovery, north Asian markets typically outperform with India catching up following year: Rahul Chadha In the specialised capital goods segment, we believe India in terms of power sector is a very long-term story and there are a lot of good, niche players available in the power equipment industry and that is where we are positive on. You Might Also Like: Rajesh Bhosale's 2 top trading ideas: TCS & Ashok Leyland
Economic Times
5 days ago
- Business
- Economic Times
Jaiprakash Toshniwal sees value in 3 segments; goes contra on IT & specialized capital goods
Jaiprakash Toshniwal, Fund Manager, LIC Mutual Fund Asset, says certain sectors currently offer better earning growth than nominal GDP growth. Pharma and chemical sectors, especially specialty chemicals, show positive valuation and growth. IT and specialized capital goods segments on the other hand, present contra call opportunities. These sectors are expected to yield value from a medium to long-term perspective. Investment houses are considering funds focused on IT and capital goods. ADVERTISEMENT Since you are a fund manager, let us begin by looking at value in the markets right now. What is your strategy on the value front? How does the marketplace seem in terms of value- based sectors? Jaiprakash Toshniwal: In terms of value in the market, currently there are certain pockets of the sectors where the earning growth is much higher than the nominal GDP growth and that is where the valuations are reasonable in terms of growth. In some of these sectors like pharma and chemical, we are very positive in terms of valuation and we are also seeing growth, especially in specialty chemicals. So, these are the three sectors where I see value emerging from a medium to long-term perspective. What is your perspective on tariff concerns? August 7 is the new deadline. In that context, how should one bet in the market? Jaiprakash Toshniwal: Yes, on the tariff side, August 7 is a deadline and what we have seen in terms of this 25% tariff is already there now but a large part of the tariff, almost 40% is basically India export to the US through specialised electronics as well as pharmaceuticals where no tariff has been announced yet. So, to that extent, the concern simmers down. Having said that, some of the exposures which are very much focused on US exports are basically gems and jewellery and textiles. Those are the most impacted sectors and at this point of time, when we see the numbers compared to the other south Asian countries, the tariff in India is very high. So, to that extent, there would be an impact on the market opportunity for Indian companies in these two sectors. If someone is willing to park funds and build a portfolio, what should be the strategy at this point in time? Which sectors will be insulated from the news events which will come later and at the same time, what is your view on the specialty chemical space and how are you eyeing the earning season because the first half of the earning season was weak, but the second half is still giving us a few hopes? Jaiprakash Toshniwal: It is very hard to say where to allocate and where not to allocate now because February and April onwards the world order has been very different in terms of war and different terms of tariffs. At this point of time it is okay to say that a diversified portfolio is a good approach for investors in India and historically also, we have seen that our earnings growth is in line with the nominal GDP growth rate and investors have made a reasonable amount of wealth from investing in a diversified portfolio approach. Having said that, going ahead, we are seeing that on the earning side, the nominal GDP deflator is lower because of lower inflation. The nominal GDP is settling at 9% level and in Q1 also, whatever numbers we have seen on the headline indices, is between 6% and 8% depending on which indices you take. So, to sum it up, earning growth is reasonable across sectors if you want to focus on the medium-term, one should probably avoid auto and auto ancillaries but there is a certain value emerging in pharma, specialty chemicals and capital market companies. All these segments look good. The agrochemical sector looks good because that sector is now coming out of the cyclical bottom of the last two years. ADVERTISEMENT All these sectors look interesting at this point of time and as a portfolio manager of an investment house, we are all positive on these few sectors which I mentioned. Specialty chemicals is a very specialised segment and there the companies have to be evaluated on a company specific and chemical side specific manner. I want to highlight one data point that for most specialty chemical companies, the balance sheet became so strong in the last four-five years, that they can invest almost Rs 1,000 crore capex on a cumulative basis on a specific name. This Rs 1,000 crore is a very reasonable number to expand capacity and to cater to the market globally and not only the US market. So far we are talking about long-term strategies. But if someone wants to make the most out of this volatility, is there any contrarian bet that you are focusing on or is there any specific concentration in any theme or sector or type of companies? Jaiprakash Toshniwal: Two sectors to stand out if one has to take contra call. We as a house are also taking in some of the funds which are predominantly in the IT sector as well as the capital goods or a specialised capital goods segment. IT sector valuations are very reasonable. We are worried about the earnings growth but the Q1 numbers show that most of these companies made deal wins recently. As the macro turnout happens in the US, at least on the US side, the BFSI segment is doing good as well as the high-tech and healthcare segments. ADVERTISEMENT The other manufacturing segment is not that great. Once that picks up and there is a macro tailwind story in the US, the IT sector should do well and in IT, the sub-segment ER&D segment also has a reasonable green shoot because of the EU and US deal because most of our IT R&D companies are exposed to European auto OEMs and as European relationship improves in terms of the tariff side, we see auto OEMs started spending in the Europe market and that is a positive for ER&D space. In the specialised capital goods segment, we believe India in terms of power sector is a very long-term story and there are a lot of good, niche players available in the power equipment industry and that is where we are positive on. (You can now subscribe to our ETMarkets WhatsApp channel)
