Latest news with #ShivPuri
Economic Times
10 hours ago
- Business
- Economic Times
Market's next big cue may come from earnings and rural revival: Shiv Puri
Agencies The second thing is technology matters and they are able to invest and upgrade much better than some of the smaller names. "One thing that we have clearly seen over the last 12 months is a tightening of unsecured personal lending and that was done correctly because there was a lot of issues happening out there. But as that outlook changes, you are going to see consumption also get a tailwind," says Shiv Puri, TVF Capital Advisors. Other than large private banks, is there anywhere else where you are seeing some hope of positivity, you have been upbeat on healthcare for quite some time now, any views on that? Shiv Puri: Within healthcare one of the areas that we have been very optimistic on is in hospitals, but then again, it is an area to be very careful about because hospitals are actually a very difficult business, but if done correctly are one of the best businesses you could own. And there are some operators here who are able to deliver quality healthcare, attract the right kind of patients, attract the right kind of doctors, understand the capital allocation process very well and therefore deliver very high return on capital and healthcare is underpenetrated in India. So, if you are able to build that trust with consumers, the runway for growth is very long. I just wanted to touch upon the consumption space because India has been one of those biggest consumption stories and of late, we have seen government also taking some steps with respect to RBI cuts, tax cuts as well. Do you believe that there are good opportunities to still play this particular sector or the valuation comfort is still there? Shiv Puri: Well, consumption is very broad in India. So, you could have something like FMCG that could be pretty highly penetrated and very competitive as well and you could have certain areas like retail where their runway for growth is very long. So, within the broad theme of consumption, the Indian markets are very underpenetrated, but you have to be very selective in terms of where you look in that stories. One thing that we have clearly seen over the last 12 months is a tightening of unsecured personal lending and that was done correctly because there was a lot of issues happening out there. But as that outlook changes, you are going to see consumption also get a tailwind. When you talk retail, while that may be as basic as buying a particular thing, the format of how you buy is where the sizable opportunity is, everything from quick commerce to traditional retail and unfortunate as it may be the listed pool is very-very limited. So where is it within retail that you find those opportunities and you think there is that longer runway? Shiv Puri: So, again one of the things that we have looked at in India is that typically if a business is very difficult, it is a double-edged sword because it means that it is hard to make money but it also means it is harder for other people to enter. And if you look at retailing, if you look at fashion retailing, these are businesses that are very difficult to do, but you do have success stories. I mean, one of the largest wealth creators globally are basically owners of retail chains whether it is online or offline. And so in India, if you have a company that has been working on that for a number of years is obviously doing really well and it is still in only a few hundred cities, but a lot more expansion that can happen that is where the opportunity lies. Do you believe the premiumization wave that we have seen across consumption, do you believe that that play is still very much present in the market because if you talk about the entire consumption space compared to FMCG, pure play, consumption discretionary that has done much better. Would you be placing your bets in that segment? Shiv Puri: The premiumization wave has a long way to go and it is both good and bad. The good is, of course, it creates opportunities in different sectors within consumer discretionary. The bad is the consumer base is not broadening out as well as we would like for that to happen in India. So, you are seeing more wealth getting concentrated and therefore, that is creating opportunity especially in leisure and travel and services, but in other areas where there are a lot of different companies out there, it would be great to see the consumer base broaden out a lot more. But again, this consumer discretionary is a big basket which is playing. So, any select or any subsegment that is your preferred bet right now, be it autos, be it retail that we just touched upon? Shiv Puri: I would say in retail there are a couple of plays that are really interesting. I think areas like autos, etc, are not something that we have looked at very closely, tend to be very competitive. Oh yes, that is indeed. But give us some sense that where is the next big cue for the markets can come from because we are amidst that global uncertainty, the tariff, some experts do believe that the worst is rather behind and now the negotiations in and on will take place and yes, of course, the earning season is also through. So, where is the next big cue can be lying for the markets? Shiv Puri: Interestingly in markets in India the cue ends up being earnings coming through and the markets tend to react to it. And so, like I said earlier, if two-and-a-half of the three are in place, you are in a good position for the markets to respond. And based on some of the areas where we are talking about, which is increased credit availability, rural pickup, government capex spend, you could see a pickup in earnings with a favourable base effect and all of that could then therefore mean a positive outcome for the market. I just want to get back to the point that you were making on financials because I mean, traditionally you thought financials, private banks or maybe a few larger PSBs as well but now you have got that regulatory backing, you have got the central bank making the moves which only makes financials extremely attractive and the larger pool right, I mean everything from even insurance plays, etc, put in over there and, of course, NBFCs. Is it time to look at bottom-up stories there or still stick by with the leaders in financials? Shiv Puri: In financials, one of the things we have observed is scale matters and therefore, the big tend to be able to withstand uncertainties much better than the smaller balance sheets. The second thing is technology matters and they are able to invest and upgrade much better than some of the smaller names. And so in financials, you do see accidents happen and that is part of it globally and so as long as you do not let that happen to you which is not just about lending, it is about culture, it is about a whole lot of different things, then just by the fact that accidents happen to other firms means you get stronger and so therefore some of these firms are still very well positioned because India is still under penetrated credit market. We have not reached any level of saturation yet. So, financials, healthcare, consumer discretionary, anything else that you are bullish on or buying? Shiv Puri: That would be enough to do well in the markets.
Time of India
10 hours ago
- Business
- Time of India
Market's next big cue may come from earnings and rural revival: Shiv Puri
"One thing that we have clearly seen over the last 12 months is a tightening of unsecured personal lending and that was done correctly because there was a lot of issues happening out there. But as that outlook changes, you are going to see consumption also get a tailwind," says Shiv Puri , TVF Capital Advisors . Other than large private banks , is there anywhere else where you are seeing some hope of positivity, you have been upbeat on healthcare for quite some time now, any views on that? Shiv Puri: Within healthcare one of the areas that we have been very optimistic on is in hospitals, but then again, it is an area to be very careful about because hospitals are actually a very difficult business, but if done correctly are one of the best businesses you could own. And there are some operators here who are able to deliver quality healthcare, attract the right kind of patients, attract the right kind of doctors, understand the capital allocation process very well and therefore deliver very high return on capital and healthcare is underpenetrated in India. So, if you are able to build that trust with consumers, the runway for growth is very long. I just wanted to touch upon the consumption space because India has been one of those biggest consumption stories and of late, we have seen government also taking some steps with respect to RBI cuts, tax cuts as well. Do you believe that there are good opportunities to still play this particular sector or the valuation comfort is still there? Shiv Puri: Well, consumption is very broad in India. So, you could have something like FMCG that could be pretty highly penetrated and very competitive as well and you could have certain areas like retail where their runway for growth is very long. So, within the broad theme of consumption, the Indian markets are very underpenetrated, but you have to be very selective in terms of where you look in that stories. One thing that we have clearly seen over the last 12 months is a tightening of unsecured personal lending and that was done correctly because there was a lot of issues happening out there. But as that outlook changes, you are going to see consumption also get a tailwind. Live Events When you talk retail, while that may be as basic as buying a particular thing, the format of how you buy is where the sizable opportunity is, everything from quick commerce to traditional retail and unfortunate as it may be the listed pool is very-very limited. So where is it within retail that you find those opportunities and you think there is that longer runway? Shiv Puri: So, again one of the things that we have looked at in India is that typically if a business is very difficult, it is a double-edged sword because it means that it is hard to make money but it also means it is harder for other people to enter. And if you look at retailing, if you look at fashion retailing, these are businesses that are very difficult to do, but you do have success stories. I mean, one of the largest wealth creators globally are basically owners of retail chains whether it is online or offline. And so in India, if you have a company that has been working on that for a number of years is obviously doing really well and it is still in only a few hundred cities, but a lot more expansion that can happen that is where the opportunity lies. Do you believe the premiumization wave that we have seen across consumption, do you believe that that play is still very much present in the market because if you talk about the entire consumption space compared to FMCG, pure play, consumption discretionary that has done much better. Would you be placing your bets in that segment? Shiv Puri: The premiumization wave has a long way to go and it is both good and bad. The good is, of course, it creates opportunities in different sectors within consumer discretionary. The bad is the consumer base is not broadening out as well as we would like for that to happen in India. So, you are seeing more wealth getting concentrated and therefore, that is creating opportunity especially in leisure and travel and services, but in other areas where there are a lot of different companies out there, it would be great to see the consumer base broaden out a lot more. But again, this consumer discretionary is a big basket which is playing. So, any select or any subsegment that is your preferred bet right now, be it autos, be it retail that we just touched upon? Shiv Puri: I would say in retail there are a couple of plays that are really interesting. I think areas like autos, etc, are not something that we have looked at very closely, tend to be very competitive. Oh yes, that is indeed. But give us some sense that where is the next big cue for the markets can come from because we are amidst that global uncertainty, the tariff, some experts do believe that the worst is rather behind and now the negotiations in and on will take place and yes, of course, the earning season is also through. So, where is the next big cue can be lying for the markets? Shiv Puri: Interestingly in markets in India the cue ends up being earnings coming through and the markets tend to react to it. And so, like I said earlier, if two-and-a-half of the three are in place, you are in a good position for the markets to respond. And based on some of the areas where we are talking about, which is increased credit availability, rural pickup, government capex spend, you could see a pickup in earnings with a favourable base effect and all of that could then therefore mean a positive outcome for the market. I just want to get back to the point that you were making on financials because I mean, traditionally you thought financials, private banks or maybe a few larger PSBs as well but now you have got that regulatory backing, you have got the central bank making the moves which only makes financials extremely attractive and the larger pool right, I mean everything from even insurance plays, etc, put in over there and, of course, NBFCs. Is it time to look at bottom-up stories there or still stick by with the leaders in financials? Shiv Puri: In financials, one of the things we have observed is scale matters and therefore, the big tend to be able to withstand uncertainties much better than the smaller balance sheets. The second thing is technology matters and they are able to invest and upgrade much better than some of the smaller names. And so in financials, you do see accidents happen and that is part of it globally and so as long as you do not let that happen to you which is not just about lending, it is about culture, it is about a whole lot of different things, then just by the fact that accidents happen to other firms means you get stronger and so therefore some of these firms are still very well positioned because India is still under penetrated credit market. We have not reached any level of saturation yet. So, financials, healthcare, consumer discretionary, anything else that you are bullish on or buying? Shiv Puri: That would be enough to do well in the markets.
Economic Times
10 hours ago
- Business
- Economic Times
Midcaps still overheated; Nifty valuations offer relative safety: Shiv Puri
Agencies So, if you factor that in, it is dependent on two parts, one is, of course, how well India does, but the second is how well India does relative to the S&P 500 to the US. "The earnings outlook which started moderating over the last 12 months has started to bottom. You are seeing that in the GDP numbers and therefore with the lag you will start also seeing that in earnings rebounding," says Shiv Puri, TVF Capital Advisors. What is the world looking like? It is just utter chaos, but it seems like there is some stability for equity markets. Shiv Puri: Yes, in the last few years I cannot think of many times where there has not been chaos in the global markets. But for the markets to do well typically it needs three things. One is, it needs free flowing credit. Second is, you need a strong earnings outlook and the third is, you need cheap valuations. And if you look at the story in India 12 months ago, all three were yellow or even red. But today over the last 12 months, you have seen with the reserve pay increasing, liquidity into the system, with rates getting cut, we do have liquidity that is flowing back into the credit markets. The earnings outlook which started moderating over the last 12 months has started to bottom. You are seeing that in the GDP numbers and therefore with the lag you will start also seeing that in earnings rebounding. Valuations still remain high, they do not remain cheap but within that again if you look at what is happening in the larger names and the Nifty kind of names, those names look very reasonable; whereas if you look at the midcap and the smallcaps, they still look high. So, we are two-and-a-half out of three in terms of what it takes to have a sustained market which is quite resilient and so therefore, the equity markets outlook is constructive, barring geopolitical risk which is something that we live with now every day of the year and those are inherently unpredictable. The global markets have made a bet that geopolitical conflicts are going to be regional and not global and as long as that remains the case, the markets are going to be okay. But that is obviously inherently unpredictable. But tariffs would be and we have definitely seen that get priced in in the markets for store I guess beginning March and then in the run-up to April. Since then, markets have rebounded, S&P 500 already at an all-time peak, and many other global markets as well, we are also pretty much close to that. But is that baked in into the prices? Shiv Puri: I think the tariffs has created more uncertainty in terms of what those levels actually will be than the reality of what the impact is going to happen. And if you look at it in the context of India, exports as a percentage of GDP is still fairly low and most of that is still services. So, in the context of goods, while it is still important for industries and it needs to be resolved, at the GDP level, at the economic level for India, it should not be that material an impact. However, the thing to keep in mind is, of course, consequences of consequences. The second-degree impacts of everything and so those are going to be determined by where these rates actually end up because obviously, they have been all over the map in the last six months. And you spoke about how earnings need to solidify a little bit more for the funders of India to be a little more solid. Now, the quarter gone by, quarter four, we were already headed in a muted expectations which is why the numbers were looking fairly okay. But going ahead in the quarters to come, you are going to have the base effect from last year kick in. So, do you believe fundamentally we are going to be doing well or the numbers only going to look good because there was a weak base? Shiv Puri: Well, if you rewind the clock a little bit, we had a huge bounce back in earnings post covid and you had 20% plus earnings growth for the index because covid was depressed. Thereafter it became a little hard when you entered the last 18 odd months and so you saw muted earnings growth in the single digits. When you look at the next 12 months, one, of course, as you mentioned correctly there is a base effect that will be favourable, but second is, there are other pockets that are starting to now pick up. One, of course, as I said is credit is starting to flow more freely in the economy, you are seeing rural consumption that is starting to pick up, government capex which was pretty subdued looks like it is starting to move a little higher. And the two real areas which still have not seen anything improve yet is urban consumption which is still fairly muted and the second is private capex, company capex numbers still have not picked up. But when you put all the pieces together, I still think it is two-and-a-half out of three or three out of four in terms of where we are. So, definitely, a better position than last year. You talked about as to how there is valuation comfort still when it comes to largecaps. Where do you see those stories play out and where is it that you are finding those outsized opportunities? Shiv Puri: Well, I think still there areas like, for example, private sector financial, especially the largecap names seem to be fairly reasonably priced at the moment and then again, if you look at some of the other sectors, valuations are always in context of what their durability and quality of the growth is going to be. So, it is magnitude, durability, and quality. And so, if you factor some of that in, there are a few other areas even in consumer discretionary, in healthcare, especially in some of the hospital names that I still think have a very long runway of growth where I see opportunity. Also talk about the about the fund flow that we are seeing because of late, the FIIs are seem to be making a bit of a comeback in the Indian markets and we did talk about the global uncertainty that still persists. Do you believe, can India be that oasis amongst all the emerging markets and the developed economies which are on the stock market front they are already at an all-time high and while Indian macros are now turning favourable there is a case where the fund flow can now turn positive? Shiv Puri: It is. One of the things that FIIs have seen is that a lot of the money comes from the US and if you look at the S&P 500 over the last 5, 10, 15, 20 years, it has delivered dollar returns comparable or even better than what the Indian equity markets have delivered in dollar terms. And then, of course, you have added impediments here in terms of taxes and things like that that maybe some of those institutions do not have to deal with. So, if you factor that in, it is dependent on two parts, one is, of course, how well India does, but the second is how well India does relative to the S&P 500 to the US.
Time of India
10 hours ago
- Business
- Time of India
Midcaps still overheated; Nifty valuations offer relative safety: Shiv Puri
"The earnings outlook which started moderating over the last 12 months has started to bottom. You are seeing that in the GDP numbers and therefore with the lag you will start also seeing that in earnings rebounding," says Shiv Puri , TVF Capital Advisors . What is the world looking like? It is just utter chaos, but it seems like there is some stability for equity markets. Shiv Puri: Yes, in the last few years I cannot think of many times where there has not been chaos in the global markets. But for the markets to do well typically it needs three things. One is, it needs free flowing credit. Second is, you need a strong earnings outlook and the third is, you need cheap valuations. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Kulkas yang belum Terjual dengan Harga Termurah (Lihat harga) Cari Sekarang Undo And if you look at the story in India 12 months ago, all three were yellow or even red. But today over the last 12 months, you have seen with the reserve pay increasing, liquidity into the system, with rates getting cut, we do have liquidity that is flowing back into the credit markets . The earnings outlook which started moderating over the last 12 months has started to bottom. You are seeing that in the GDP numbers and therefore with the lag you will start also seeing that in earnings rebounding. Valuations still remain high, they do not remain cheap but within that again if you look at what is happening in the larger names and the Nifty kind of names, those names look very reasonable; whereas if you look at the midcap and the smallcaps, they still look high. Live Events So, we are two-and-a-half out of three in terms of what it takes to have a sustained market which is quite resilient and so therefore, the equity markets outlook is constructive, barring geopolitical risk which is something that we live with now every day of the year and those are inherently unpredictable. The global markets have made a bet that geopolitical conflicts are going to be regional and not global and as long as that remains the case, the markets are going to be okay. But that is obviously inherently unpredictable. But tariffs would be and we have definitely seen that get priced in in the markets for store I guess beginning March and then in the run-up to April. Since then, markets have rebounded, S&P 500 already at an all-time peak, and many other global markets as well, we are also pretty much close to that. But is that baked in into the prices? Shiv Puri: I think the tariffs has created more uncertainty in terms of what those levels actually will be than the reality of what the impact is going to happen. And if you look at it in the context of India, exports as a percentage of GDP is still fairly low and most of that is still services. So, in the context of goods, while it is still important for industries and it needs to be resolved, at the GDP level, at the economic level for India, it should not be that material an impact. However, the thing to keep in mind is, of course, consequences of consequences. The second-degree impacts of everything and so those are going to be determined by where these rates actually end up because obviously, they have been all over the map in the last six months. And you spoke about how earnings need to solidify a little bit more for the funders of India to be a little more solid. Now, the quarter gone by, quarter four, we were already headed in a muted expectations which is why the numbers were looking fairly okay. But going ahead in the quarters to come, you are going to have the base effect from last year kick in. So, do you believe fundamentally we are going to be doing well or the numbers only going to look good because there was a weak base? Shiv Puri: Well, if you rewind the clock a little bit, we had a huge bounce back in earnings post covid and you had 20% plus earnings growth for the index because covid was depressed. Thereafter it became a little hard when you entered the last 18 odd months and so you saw muted earnings growth in the single digits. When you look at the next 12 months, one, of course, as you mentioned correctly there is a base effect that will be favourable, but second is, there are other pockets that are starting to now pick up. One, of course, as I said is credit is starting to flow more freely in the economy, you are seeing rural consumption that is starting to pick up, government capex which was pretty subdued looks like it is starting to move a little higher. And the two real areas which still have not seen anything improve yet is urban consumption which is still fairly muted and the second is private capex, company capex numbers still have not picked up. But when you put all the pieces together, I still think it is two-and-a-half out of three or three out of four in terms of where we are. So, definitely, a better position than last year. You talked about as to how there is valuation comfort still when it comes to largecaps. Where do you see those stories play out and where is it that you are finding those outsized opportunities? Shiv Puri: Well, I think still there areas like, for example, private sector financial, especially the largecap names seem to be fairly reasonably priced at the moment and then again, if you look at some of the other sectors, valuations are always in context of what their durability and quality of the growth is going to be. So, it is magnitude, durability, and quality. And so, if you factor some of that in, there are a few other areas even in consumer discretionary, in healthcare, especially in some of the hospital names that I still think have a very long runway of growth where I see opportunity. Also talk about the about the fund flow that we are seeing because of late, the FIIs are seem to be making a bit of a comeback in the Indian markets and we did talk about the global uncertainty that still persists. Do you believe, can India be that oasis amongst all the emerging markets and the developed economies which are on the stock market front they are already at an all-time high and while Indian macros are now turning favourable there is a case where the fund flow can now turn positive? Shiv Puri: It is. One of the things that FIIs have seen is that a lot of the money comes from the US and if you look at the S&P 500 over the last 5, 10, 15, 20 years, it has delivered dollar returns comparable or even better than what the Indian equity markets have delivered in dollar terms. And then, of course, you have added impediments here in terms of taxes and things like that that maybe some of those institutions do not have to deal with. So, if you factor that in, it is dependent on two parts, one is, of course, how well India does, but the second is how well India does relative to the S&P 500 to the US.
