Latest news with #PramodAmthe
Time of India
6 days ago
- Business
- Time of India
We have added 2E Networks in July, exited UPL; prefer HDFC and Axis among private banks: Pramod Amthe
Pramod Amthe , Head Of Institutional Equity Research, InCred Capital , says they are adjusting their portfolio. They are exiting more stocks than adding. E2E Networks is a new addition for July. The firm is exiting UPL to book profit. They prefer HDFC Bank and Axis Bank . Among PSUs, they downgraded Bank of Baroda . The firm prefers largecaps like SBI and Canara Bank . These changes reflect their current investment strategy. We are going nowhere. Currently at 24,600, but for the past four to six weeks, we are just swinging between the 24,500 mark and 25,300. Do you think this consolidation phase will continue for longer than anticipated? Pramod Amthe: We have been broadly indicating that the market will remain in a consolidation phase, especially where the earnings trajectory has been relatively tepid and no change is seen even in the large part of the results which have come in in the first quarter. On top of that, based on the flows we have seen some excitement coming through, predominantly driven by flows and with the recent overhang of the tariff, especially where India seems to be sidelined as compared to the earlier expectation that we should sail through. It has incrementally added a new dimension and put pressure on the consolidation phase. We stay put with our broader index target where we see a low single digit return for this calendar year and that seems to be prevailing for the last couple of months. 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 by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Play War Thunder now for free War Thunder Play Now Undo I agree that volatility is prevalent at present and one should practice caution but at the same time, there is a lot of sectoral churning these days. We started the earnings trajectory with the IT numbers. After the Q1 numbers from the major IT companies, the sector was in a downturn, but now it is witnessing some sort of momentum. If we talk about the sector specific approaches, which are the sectors on your radar at present? Pramod Amthe: You are right. What we have selectively done in the recent result season is clearly pre-results or in the last couple of weeks, the extent of valuation correction that has happened is much steeper than the analysts' EPS consensus cuts. Just to give you some numbers, EPS cuts in the last six months have been in the region of around 8% and versus that, the index has corrected at nearly twice that pace. We clearly see some selective opportunity on a tactical basis where we have upgraded Wipro and L&T Tech Services and that seems to be more tactical because there is still an overhang about the global growth and especially how the US will shape up post the tariff tantrum. So that is the one which we have seen. In the recent weeks, where we have seen some stability is in the FMCG. The index has seen stability and is making a comeback. We have upgraded HUL to an Add. They are getting the portfolio more towards premium and green shoots are visible in terms of the volume growth. So those are the couple of select plays which we are looking at on the tactical front. What are your high conviction stock bets? There is a Nifty outperformer in Thyrocare which is still there on your list. What are the other high conviction bets that you have taken currently? Pramod Amthe: Within the high conviction, we are still exiting more stocks than adding. Last month, we added the largecap NTPC versus the four stocks which we exited. For the month of July, we are looking at the recent initiation of E2E Networks which is a proxy play for India EAI spend and there we have started with the add rating and with the new parent L&T is coming in to pivot the business as a more B2B than a B2C. We feel the runway for growth is going to be drastic for E2E, and that is a new addition which we are making for July. Against that, we are exiting UPL in the high conviction list of 22, 23 stocks of our total 200 stocks coverage. Live Events You Might Also Like: Post this earning season, Pankaj Murarka is avoiding these sectors. Here's why The reason to exit UPL is we got the bottom right. The sign of cyclical reversal is clearly visible in UPL, but the results have been a dampener, and so we would like to book our profit in UPL on the short-term basis. You are overweight on financial services overall. If you talk about PSU and private banks, do you see some kind of distinction coming in as far as this quarter is concerned? The interest rate trajectory is quite visible with the 50 basis point cut that was announced in the last policy. In the monetary policy due tomorrow, the expectation is that a 25 basis point cut may be there. So, how should one approach PSU and private banks particularly? Pramod Amthe: We are more inclined towards the private banks where the central bank policy towards reviving the credit growth, even though the signs are still not completely visible, should play out in favour of the private banks wherein our high conviction is on HDFC Bank for the quality and Axis Bank for playing on revival of credit growth. So those are the high conviction ideas. Among PSUs, we are selective and have downgraded Bank of Baroda . So, the preference is more towards largecaps like SBI and also towards Canara Bank versus the other PSU banks.
Time of India
09-06-2025
- Business
- Time of India
Buy on dips if you believe in long-term India growth, 3 investment themes to bet on: Mihir Vora
Mihir Vora , CIO, Trust Mutual Fund , advises investors to view market dips as buying opportunities, emphasizing the importance of patience and conviction in the long-term India growth story. He highlights the potential of financialization of savings , physical asset creation, and digitization , particularly in new-age and disruptive business models, as key investment themes for the next 5 to 10 years. We were just talking about how picture perfect this scenario is. You have got lower inflation, and lower EMIs thanks to the RBI. Lower taxes were taken care of in the Budget itself and good monsoon as well as lower interest rates. Is this construct best suited for the markets? Mihir Vora: Absolutely. You said it all. It is a long list and broadly we can summarise it by saying that the financial conditions are as loose as they can be and it is the case not only in India, even globally, central banks have been cutting rates in the last few months at a record pace. So, there is a case for a risk-on trade and that is what we are seeing in the world as well as in India. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Play this game for 1 minute and see why everyone is addicted. If you see the Dow, the US markets are also at near highs. We are also touching our highs. It is broadly a risk-on trade fuelled by easy money, easy financial conditions, so enjoy the ride. Are MFs sitting on cash or are you guys specifically all in? Mihir Vora: We typically do not keep more than 5-7% cash, so we are not sitting on large amounts of cash. But in general, the MF industry has normal levels of cash, nothing to write home about in a sense it is not extraordinarily high or extraordinarily low. There is enough ammunition on the sidelines and we can see that in the numbers MFs are buying on a daily basis. The kind of frontloading that RBI has done well, starting with financials, will trickle into a lot of sectors – be it real estate, autos or consumer discretionary. What is your preference list like because in terms of the stock picking, financials is one of the sectors that you are betting on, but in terms of the preference, how do you line it up? Mihir Vora : That there will be a knee-jerk reaction to the rate cut is a given. So, should see that impact in the next few days also. We saw some impact on Friday, but it should continue for a few days. But if you look at the aggregate picture, the demand conditions on the urban side are still not picking up. For example, two-wheelers have started picking up a bit, but cars have not picked up and plus on in auto you also have the threat of China holding back some of the crucial raw materials for magnets, etc. Live Events You Might Also Like: Pramod Amthe on 3 stock ideas for June and 2 stocks where they booked profit In real estate, sales have been robust on the high end side while on the low end side, there is still traction to come. The government has realised that the RBI and the government tightened too much last year. RBI was anyway keeping things tight and the government also slacked off on spending because of the election. If you look at the March numbers, the government spending really shot up quite a lot. So, the government and the RBI are both trying to play catch-up to make sure that the impact of last year does not stay too long. We did see a cyclical slowdown and they are now trying to make sure that we do not overdo the mistake of last year. So, maybe they are probably even overcompensating which is not a bad thing. In your most recent report you have mentioned the seven drivers of the next two decades in India. Tell us a little bit more about that and the sectors that stand to gain the most. Mihir Vora: These are more of the macro trends or mega trends if you say, things like demographics, digitization, democracy which are part of our structural story. Then, you have things like digitization which is technological disruption in which India has actually leap-frogged into a lot of technology and then, you have things like physical infrastructure creation which is going to be the story for the next few years because if we have to compete with China, we have to create a lot of infrastructure. So, the seven Ds basically talk about these seven mega trends. The themes that arise from these are basically financialization of savings, physical asset creation. In financialization of savings all the lenders will do well because we have to grow at GDP plus, but then the capital market players, the wealth managers, the broking, the asset management will continue to do better. Everything will tap into the higher savings pool because as income levels rise, the savings pools rise at a rate which is much faster than GDP growth. You Might Also Like: Julius Baer sees consumption revival in India taking stocks to record high So, the capital-market linked, the savings-linked players will grow faster than the lenders. Physical asset creation is all the things that we talk about in terms of job creation, China plus one, Make in India, aatmanirbharta, defence, T&D all the sectors where we have to invest a lot to sustain this 6-7% growth is the physical asset creation theme. So, financialization of savings, physical asset creation and the third theme that we like is digitization where basically new-age companies, new business models, disruptive business models those are the kind of things that we like. And these are plays for the next 5 to 10 years, so we will just stick to them. But when you look at 5 to 10 years, everything looks quite okay, but everything in the market is a function of the price at what you have bought or paid… Mihir Vora : And the point is that with these valuations and these kinds of market levels, you have to take a longer-term call. Yes, you have no option. But that is what I am saying, listening to you if someone says okay, I want to put my money now into capital markets themes, where is the opportunity because you have already seen such a big runup. Mihir Vora: Here is where our inherent philosophy of terminal value investing comes into play because the way we look at it is that markets end up optically paying a higher premium for stocks which have a long runway of growth. If in the runway of growth, for example, the capital market players are not 3-4 years, but 10, 15, 20 years, then these stocks will continue to look optically expensive on the next year's PE or the two-year, three-year forward PE. The point is that the market is assuming or giving credit to the fact that these sectors probably will grow at say 10-15% or 15% to 20% not for six-seven years, but maybe even for 15 years. You Might Also Like: Exclusive | Raamdeo Agrawal reveals his simple 2-step formula for finding multibagger stocks Now, no analyst builds in a growth rate of more than 7-8% beyond 10 years, that is where the philosophy goes wrong because we have seen year after year in the last 30 years there have been so many stocks and sectors which grew for 15%, 20%, even for 20 years, that is where the valuations start look expensive and these stocks even 20 years back looked expensive and five years ago also they looked expensive. NSE is not even listed and it is quoting all that valuation. Mihir Vora: Exactly. In high growth stocks and sectors, especially stocks and sectors where the runway of growth is very long, you will end up paying optically higher premiums in the shorter term. Back in March and April, there was a broad-based selloff rather than the consensus call to stick with the largecaps. Now you are highlighting that it is a risk-on in the markets. Do you believe that now is the time and given the way fundamentals are shaping up, can one start allocating more towards the SMIDs? Mihir Vora : Definitely, I think every dip is a time to buy frankly because it is about patience and conviction. Your patience will be tested but your conviction will be rewarded. In times like these you really go and check it out. Even if you have the courage and the capacity, add more because ultimately you will have to take a longer-term call on the India story – whether India will do better than the rest of the world over the next 10, 15, 20, years. If the call is yes, then every dip is a time to buy.
Time of India
06-06-2025
- Business
- Time of India
Pramod Amthe on 3 stock ideas for June and 2 stocks where they booked profit
Pramod Amthe , Head of Institutional Equity Research, InCred Capital , says they have booked profit in Adani Port and moved out of Cipla due to margin challenges, while introducing Camlin Life Science, anticipating stabilization and benefits from anti-dumping duties. Thyrocare with new franchise expansion and Birla Corp's undervaluation drove outperformance in May. InCred also upgraded two stocks around February, March at the bottom of the market, Bajaj and SAMIL. Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like An engineer reveals: 1 simple trick to get all TV channels Techno Mag Learn More Undo What is your take on the markets because the earning season just got concluded. It seems to be a decent set vis-à-vis the consensus street estimates. What was your take on the earnings as well as from here on where do you see the markets headed broadly? Pramod Amthe: If you look at earnings season for Nifty 50, the growth is still tepid on the EPS basis at around 5%. This was broadly in line with the expectations and that is a comforting factor. But for all the 4,000 odd listed companies, the growth is around 9%. So, the mid and smallcaps are definitely giving a better profit growth even in the March quarter, which is similar to the December quarter growth of 9%. Having said that, some of the macro factors have played out well for India in the sense of the last fortnight prediction for early onset of monsoon, or the oil prices coming down. So, macros are getting much quickly factored into the marketplace and hence the inclination more towards our bull case index targets are playing out, better than the expected in the short term. You have a couple of high conviction stock bets. To name a few, there are Thyrocare, Birla Corp, Shriram Finance, TCS, Bajaj Auto, and Lupin. What is the rationale behind these high conviction stock ideas and from here on, how do you see these stocks moving? Pramod Amthe: High conviction is a monthly bottoms-up approach which we look at for our 200 stock coverage universe. What we have done for June, the ones which you listed, have been there for the last couple of months. What we have done in case of our high conviction ideas is we have booked profit in Adani Port which has been one of the good performers in the last couple of months as it is near our target price and risk-reward at this juncture we feel is not too much in favour. Live Events You Might Also Like: Nilesh Shetty stays cautious; 3 sectors see largest allocations in value portfolio We have moved out of Cipla which has been high conviction for the last couple of months because we feel there can be near-term margin challenges because of the product mix related issues. At the same time, we have introduced a smallcap name Camlin Life Science which is going to see the stabilisation of the vanillin plant along with the benefit of rights issue and the imposition of anti-dumping duties is going to give a substantial upside from the current levels. These are the three stock ideas for this month along with the remaining 17 to 18 of which you have taken a couple of stocks that have been big outperformers for us in May. As you rightly called out, one is Thyrocare on a strong visibility of new franchise expansion leading to the momentum in sales and the loss making division turning around on the high-end pathological test is the key driver for Thyrocare. Birla Corp is more on the midcap undervaluation per tonne basis is what plays out along with some momentum in the cement as seen in the fourth quarter results. Those are the things which have played out for us in these two stocks. You have a neutral stance on auto as well as auto ancillary space. But amidst that, Bajaj Auto is one of the underperformers to the Nifty but you have an add rating there. What is the outlying factor for Bajaj Auto and why do you like the stock? Pramod Amthe: We upgraded two stocks around February, March at the bottom of the market, Bajaj and SAMIL. Bajaj has seen a decent amount of correction from the top levels. We feel at this juncture the worst of KTM acquisition news is factored in in the current price levels and the valuation. Having said that, the firm has already clearly transitioned itself both into e-three-wheeler portfolio and also in case of e-two-wheelers, they are neck to neck in terms of the leadership in the electric scooters. You Might Also Like: Why is it the perfect time to invest in Nifty 200 Momentum 30 Index? The biggest comfort is the neutrality of the corporate margins in spite of handling such a big transition for the company. Even though the investors are a little bit concerned about the market share loss in motorcycles, we feel that can be addressed with the new product launches and hence at these current valuation with the expected addressable market expanding for them with a low speed scooters and the e-rickshaw, we are definitely looking at mid-teen to high-teen earnings growth for them in the next two years. I want to talk about two sectors – IT and the consumption basket. You have a neutral stance on both these packs. In IT, the valuations look better after the leg of correction that we have seen though there are some global headwinds. Analysts are becoming constructively more bullish on the IT pack primarily based on the valuation comfort there. You are neutral on consumer staples. Do you see consumer staples picking up now because of the positive triggers from rate cuts or the food inflation easing and good monsoon ahead? Pramod Amthe: Recent channel checks on it indicate that there are still headwinds. The recent restriction in terms of travel to India is going to be a little headwind to close the deals, especially large deals which have been the drivers of topline for it excluding, so we downgraded it somewhere in early part of the calendar year to neutral. We continue to hold the same as the full year guidance has not been great, encouraging, and the short-term headwinds on travel restrictions do play out in the short term. Other than the valuation factor, the topline outlook is still dim. So, we stay put with that rating. In terms of FMCG, we have been much more selective in the names which we want to play out in the FMCG sector. I would say the broader play in terms of interest rate sensitive are going to be the way we would like to play out is more on autos where we are neutral than on the consumption or on the FMCG basket where we would like to play more on the high-end side which is Ethos and the derivative of the consumption is more on TCPL Packaging which are on the high conviction idea stocks for us. We have dropped a couple of names in the recent past on the consumption side. We dropped out of Pidilite and Marico in the last three months from the high conviction list and have no immediate plans to add them back as the recovery seems to be more back-ended than the immediate benefit.
Time of India
25-04-2025
- Business
- Time of India
Axis Bank a buy after recent correction; prefer Canara Bank over SBI among PSBs: Pramod Amthe
Pramod Amthe , Head of Institutional Equity Research, InCred Capital , says though they are overweight on financial services , strategic adjustments are underway, favoring companies with growth-oriented approaches and improved liquidity . Axis Bank 's recent correction presents a buying opportunity, capitalizing on easing interest rates and credit availability . While quality stocks and safer banks initially thrived, others are expected to follow suit. Amthe favours Canara Bank over State Bank of India within the PSU banking sector. Help us with your take on the markets because from those March lows, what a move that Indian markets have seen! But given the up move, what is the strategy that you are building at this point in time? Are we comfortably sitting in terms of the valuation and also what is your outlook when it comes to the broader end? Pramod Amthe : Valuation comfort is definitely there, but the concern is, we still do not seem to be bottoming out on earnings in spite of being seasonally strong quarter March. The expectations are pretty tepid. Just around 2% QoQ growth in the Nifty 50 earnings versus a full year and a single digit YoY growth that does not give a confidence of earnings to sustain and events of geopolitical tensions bring in negative surprises and test case the earnings volatility. That is not factored in fully to the extent the bounce back came in where the participation from small and midcaps have been much sharper, with almost twice the momentum as compared to the largecaps. That gives us some amount of concern. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Play War Thunder now for free War Thunder Play Now Undo Many of these companies may not be as well balanced to handle international as well as domestic geopolitical tensions. So, we remain cautiously optimistic in that sense. You just said that despite a seasonally strong quarter, Q4 earning consensus EPS expectations has been in just single digit of 8% on a year-on-year basis. There has been no respite on the EPS downgrade trend as yet. When do you see a reversal coming in and also was not the earnings downgrade already priced in when we saw that draw down? Pramod Amthe: It has to be seen in the context of how the macro effort by both the Government of India and RBI will play out. Our sense is we will get some handle about the outlook management commentary from the April-May for the full year and people will bake in those numbers first. Second, we need to see some revival at the end markets by both interest rate reduction and also from the income tax reduction. So, hopefully from July-August, we should be preparing for some settlement and then a demand which should ultimately dry down and should set in the better expectations for the rest of the year. That might be a couple of more months unless and until we see some shocks like what we are currently going through. Other than that, we expect the bottoming to happen somewhere in the mid or the early part of September quarter for the EPS momentum. Live Events You Might Also Like: Buy the dip in case of a big gap-down opening on Monday; 2 stocks to pick: CA Rudramurthy BV Help us with your take on the financials because the harsh reality is that going ahead we will be witnessing some rate cuts which does not bode well for the financial counters. But despite the fact it is Nifty Bank that is at all-time high levels including some of the largecap names, valuation was comforting, but how are you looking at the financial space right now? Are you bullish or cautious on the markets right now? Pramod Amthe : If you look at it top-down, we are overweight on the entire financial services, but we are more selective. What we are incrementally changing is clearly the central bank is more in favour of growth orientation and improving liquidity where we have upgraded Axis Bank which today's correction on the management commentary gives an opportunity to build on to the same. We want to be able to play out this momentum on the easing interest rates and also the credit availability as compared to the recent week's performance where quality stocks have played out in a much stronger manner as the flight for safety and where the relatively safer banks have been able to showcase a better deposit mobilisation and has a possibility of credit growth. But as we go forward through the year, others will join the case and we are selectively also looking at some of the PSU banks where our preference is more for Can Bank as compared to SBI in the similar space. You Might Also Like: Markets found a temporary bottom on hopes of likely trade deals with China, India: Peter Cardillo Pakistan stock market falls 2% after India suspends Indus Waters Treaty over Pahalgam terror attack
