Latest news with #SunnyAgrawal
Economic Times
20 hours ago
- Automotive
- Economic Times
15 sectors to watch: From EMS to aerospace engineering - Sunny Agrawal maps the opportunity landscape
In this edition of ETMarkets Smart Talk, Sunny Agrawal, Head of Fundamental Research at SBI Securities, shares his insights on navigating the current volatile market landscape. As global trade uncertainties and tepid earnings weigh on investor sentiment, Agrawal highlights why smart money is shifting beyond benchmark indices. From EMS and auto ancillaries to aerospace engineering and recycling, he maps out 15 high-potential sectors that could emerge as long-term winners. He also decodes trends in the IPO market, retail investor behavior, and the evolving corporate bond landscape. Edited Excerpts – ADVERTISEMENT Q) Thanks for taking the time out. The second half of 2025 started on a volatile note. How are you looking at the markets? One of the reasons could be FIIs selling, which continues in July.A) Yes, in 2HCY25, domestic equity markets begun trading on the volatile note on the back of uncertainties on global trade deal, as US president Mr Trump extended the earlier 90 days deadline which was supposed to end on 9th Jul'25 to 1st Aug'25. Investors are waiting for clarity on the bilateral deal between US and its major trading partners to assess the impact of tariffs on the global business set-up and pursuant impact on the different sectors across the globe. For e.g.; tariff of 15% on Japanese cars put American car manufacturers on weak footing as they may have to shell out 50% more on commodities like steel, copper for Canadian production, 25% more for Mexican production etc, thereby leading to competitive advantage for Japanese car home, expectations for 1QFY26 earnings season are tepid in terms of growth as most of the heavy weight sectors like IT (due to slow execution of the deals), Banks (NIMs under pressure; asset quality issue on unsecured book leading to higher provision etc), Consumer Staples (low single digit volume growth due to impact of slowdown in urban pockets) etc are likely to report single digit earnings growth. ADVERTISEMENT Having said that, certain pockets like Cement, AMCs, Hotels, Hospitals, Ports, EMS etc are likely to report decent double-digit valuation front, India is trading at a relatively expensive valuations (FY26E PE multiple of 21.4x) vs MSCI World (FY26E PE multiple of 20.7x) & MSCI EM (FY26E PE multiple of 12.7x), thereby leading to selling by FIIs. ADVERTISEMENT On domestic front, supply of paper (IPO, PE/Promoters selling, QIP, Pref etc) has also sucked liquidity thereby adding to volatility in the secondary market. Q) IPOs have picked up recently, but EY report highlighted that Indian IPO activity in the first half of 2025 recorded 108 deals raising US$4.6b, demonstrating market resilience despite a 30% decline in transactions. A) There were no IPOs in the month of Mar'25 and Apr'25 and primary market witnessed gradual recovery from month of May'25, as the sentiments began to improve with fear of unknown event of Trump's tariff tapering off. ADVERTISEMENT As we speak, in the last 10 days of July'25, 10 issues are slated to hit street for IPOs. Going forward, as the overhang of Trump's tariff ebb, we expect very robust IPO market during 2HCY25. Q) What is the initial sense you are picking up from the June quarter results, which have started to come out? A) Result season so far has been a mixed bag. Let us discuss sector by sector. On positive side, companies from sectors like Hotels, AMCs, Cement, EMS, Ports etc have reported strong to decent set of numbers with optimistic outlook. ADVERTISEMENT On the other hand, IT sector continues to grapple with global uncertainties thereby leading to inline to disappointing set of results with weak growth commentary. Banks so far have been a mixed bag with likes of ICICI Bank, HDFC Bank reporting inline numbers with no negative surprise whereas Axis has disappointed the street. QSR and consumer staple businesses continues to report tepid growth on the back of slowdown in urban markets. Q) Is the current equity market rally largely liquidity-driven, or are there sufficient earnings fundamentals to back the optimism? A) Equity markets are blessed with robust domestic liquidity thereby leading to sharp recovery post companies have delivered double digit PAT CAGR between FY20-FY24 period and now earnings growth in FY25 has slowed down to single digit led by multiple factors such as elections, slowdown in capex spending by government, global uncertainties etc. The same is getting reflected in the equity are hopeful of double-digit earnings growth to come back from 3QFY26 onwards. Markets have become stock specific and bottom-up approach is working well at the current continue to remain constructive on growth potential of Indian economy and as we speak, corporate balance sheet of Indian corporates is in good sum up, fundamental growth story of India is intact, and investors need to be patient and should invest in businesses with strong fundamentals backed back by robust growth potential. Q) SIPs crossed Rs27K – what does it talk about the retail investor behaviour change? A) Retail investors are the smartest investors on the street and are sticking to disciplined approach of investing in the stock market through SIP route. Despite of muted sentiments on the street since last 9-10 months, SIP flow continues to remain robust, which is testimony to the fact that retail investors are no more scared of market corrections and are aware of the facts that correction is part and parcel of equity market seem to have understood the benefits of long-term systematic investment approach. Thanks to the 'Mutual Fund Sahi Hai' campaign, larger investor base is able to take advantage of wealth creation journey in the market. Q) How is the corporate bond market shaping up here in India? A) As per RBI's Financial Stability Report, June 2025, corporate bond net outstanding rose to Rs 53.6 trillion as at end of Mar' 25 with the highest ever fresh issuance of Rs 9.9 trillion (up 28% YoY) during rise in corporate bond issuance signals growing traction in India's corporate bond market. This also points to an uptick in private corporate note, Indian corporates are sitting on healthy balance sheet and are tapping bond markets to tap capital for per data, institutional investors dominate the market with holding of more than 95% of the outstanding corporate bonds. Q) Where are the pockets of opportunities coming from A) We believe winners will emerge from following pockets (1) Auto OEMs and Auto Anc, (2) Cement, (3) NBFCs particularly with focus on MSME, Housing, Gold etc (4) Capital market play like wealth managers and AMCs, (5) Select Banks, (6) EMS, (7) Recycling, (8) New age businesses, (9) Pharma - CDMO, (10) Structural Steel Tubes, (11) Telecom Service Providers, (12) Hotels, (13) Hospitals, (14) Manufacturing (Aerospace Engineering, Railway Wagons, Power Equipment, Pharma ancillary etc), (15) Metals/Mining Q) Where is the smart money moving? A) We believe smart money is chasing stocks outside the benchmark indices which are likely to deliver healthy growth in medium to long term. The list of sectors shared above are likely to outperform in medium to long term. Q) How should one play the small & midcap space? A) Investors should be selective in investing in small and midcap space and should deploy fresh capital in companies backed by strong fundamentals. Investors should avoid narrative driven stocks. (Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
Time of India
20 hours ago
- Business
- Time of India
15 sectors to watch: From EMS to aerospace engineering - Sunny Agrawal maps the opportunity landscape
In this edition of ETMarkets Smart Talk, Sunny Agrawal , Head of Fundamental Research at SBI Securities, shares his insights on navigating the current volatile market landscape. As global trade uncertainties and tepid earnings weigh on investor sentiment, Agrawal highlights why smart money is shifting beyond benchmark indices. From EMS and auto ancillaries to aerospace engineering and recycling, he maps out 15 high-potential sectors that could emerge as long-term winners. He also decodes trends in the IPO market , retail investor behavior, and the evolving corporate bond landscape. Edited Excerpts – Q) Thanks for taking the time out. The second half of 2025 started on a volatile note. How are you looking at the markets? One of the reasons could be FIIs selling, which continues in July. Explore courses from Top Institutes in Please select course: Select a Course Category Others Product Management Degree Data Science Data Analytics Operations Management CXO Cybersecurity Design Thinking Public Policy Healthcare MBA Data Science Digital Marketing Technology healthcare Artificial Intelligence PGDM MCA Management Leadership Finance Project Management others Skills you'll gain: Duration: 9 months IIM Lucknow SEPO - IIML CHRO India Starts on undefined Get Details Skills you'll gain: Duration: 28 Weeks MICA CERT-MICA SBMPR Async India Starts on undefined Get Details Skills you'll gain: Duration: 7 Months S P Jain Institute of Management and Research CERT-SPJIMR Exec Cert Prog in AI for Biz India Starts on undefined Get Details Skills you'll gain: Duration: 16 Weeks Indian School of Business CERT-ISB Transforming HR with Analytics & AI India Starts on undefined Get Details A) Yes, in 2HCY25, domestic equity markets begun trading on the volatile note on the back of uncertainties on global trade deal, as US president Mr Trump extended the earlier 90 days deadline which was supposed to end on 9th Jul'25 to 1st Aug'25. Investors are waiting for clarity on the bilateral deal between US and its major trading partners to assess the impact of tariffs on the global business set-up and pursuant impact on the different sectors across the globe. For e.g.; tariff of 15% on Japanese cars put American car manufacturers on weak footing as they may have to shell out 50% more on commodities like steel, copper for Canadian production, 25% more for Mexican production etc, thereby leading to competitive advantage for Japanese car manufacturers. Live Events Back home, expectations for 1QFY26 earnings season are tepid in terms of growth as most of the heavy weight sectors like IT (due to slow execution of the deals), Banks (NIMs under pressure; asset quality issue on unsecured book leading to higher provision etc), Consumer Staples (low single digit volume growth due to impact of slowdown in urban pockets) etc are likely to report single digit earnings growth. Having said that, certain pockets like Cement , AMCs, Hotels, Hospitals, Ports, EMS etc are likely to report decent double-digit growth. On valuation front, India is trading at a relatively expensive valuations (FY26E PE multiple of 21.4x) vs MSCI World (FY26E PE multiple of 20.7x) & MSCI EM (FY26E PE multiple of 12.7x), thereby leading to selling by FIIs. On domestic front, supply of paper (IPO, PE/Promoters selling, QIP, Pref etc) has also sucked liquidity thereby adding to volatility in the secondary market. Q) IPOs have picked up recently, but EY report highlighted that Indian IPO activity in the first half of 2025 recorded 108 deals raising US$4.6b, demonstrating market resilience despite a 30% decline in transactions. A) There were no IPOs in the month of Mar'25 and Apr'25 and primary market witnessed gradual recovery from month of May'25, as the sentiments began to improve with fear of unknown event of Trump's tariff tapering off. As we speak, in the last 10 days of July'25, 10 issues are slated to hit street for IPOs. Going forward, as the overhang of Trump's tariff ebb, we expect very robust IPO market during 2HCY25. Q) What is the initial sense you are picking up from the June quarter results, which have started to come out? A) Result season so far has been a mixed bag. Let us discuss sector by sector. On positive side, companies from sectors like Hotels, AMCs, Cement, EMS, Ports etc have reported strong to decent set of numbers with optimistic outlook. On the other hand, IT sector continues to grapple with global uncertainties thereby leading to inline to disappointing set of results with weak growth commentary. Banks so far have been a mixed bag with likes of ICICI Bank, HDFC Bank reporting inline numbers with no negative surprise whereas Axis has disappointed the street. QSR and consumer staple businesses continues to report tepid growth on the back of slowdown in urban markets. Q) Is the current equity market rally largely liquidity-driven, or are there sufficient earnings fundamentals to back the optimism? A) Equity markets are blessed with robust domestic liquidity thereby leading to sharp recovery post correction. Nifty50 companies have delivered double digit PAT CAGR between FY20-FY24 period and now earnings growth in FY25 has slowed down to single digit led by multiple factors such as elections, slowdown in capex spending by government, global uncertainties etc. The same is getting reflected in the equity markets. We are hopeful of double-digit earnings growth to come back from 3QFY26 onwards. Markets have become stock specific and bottom-up approach is working well at the current juncture. We continue to remain constructive on growth potential of Indian economy and as we speak, corporate balance sheet of Indian corporates is in good shape. To sum up, fundamental growth story of India is intact, and investors need to be patient and should invest in businesses with strong fundamentals backed back by robust growth potential. Q) SIPs crossed Rs27K – what does it talk about the retail investor behaviour change? A) Retail investors are the smartest investors on the street and are sticking to disciplined approach of investing in the stock market through SIP route. Despite of muted sentiments on the street since last 9-10 months, SIP flow continues to remain robust, which is testimony to the fact that retail investors are no more scared of market corrections and are aware of the facts that correction is part and parcel of equity market investing. They seem to have understood the benefits of long-term systematic investment approach. Thanks to the 'Mutual Fund Sahi Hai' campaign, larger investor base is able to take advantage of wealth creation journey in the market. Q) How is the corporate bond market shaping up here in India? A) As per RBI's Financial Stability Report, June 2025, corporate bond net outstanding rose to Rs 53.6 trillion as at end of Mar' 25 with the highest ever fresh issuance of Rs 9.9 trillion (up 28% YoY) during FY25. The rise in corporate bond issuance signals growing traction in India's corporate bond market. This also points to an uptick in private corporate capex. Kindly note, Indian corporates are sitting on healthy balance sheet and are tapping bond markets to tap capital for growth. As per data, institutional investors dominate the market with holding of more than 95% of the outstanding corporate bonds. Q) Where are the pockets of opportunities coming from A) We believe winners will emerge from following pockets (1) Auto OEMs and Auto Anc, (2) Cement, (3) NBFCs particularly with focus on MSME, Housing, Gold etc (4) Capital market play like wealth managers and AMCs, (5) Select Banks, (6) EMS, (7) Recycling, (8) New age businesses, (9) Pharma - CDMO, (10) Structural Steel Tubes, (11) Telecom Service Providers, (12) Hotels, (13) Hospitals, (14) Manufacturing (Aerospace Engineering, Railway Wagons, Power Equipment, Pharma ancillary etc), (15) Metals/Mining Q) Where is the smart money moving? A) We believe smart money is chasing stocks outside the benchmark indices which are likely to deliver healthy growth in medium to long term. The list of sectors shared above are likely to outperform in medium to long term. Q) How should one play the small & midcap space? A) Investors should be selective in investing in small and midcap space and should deploy fresh capital in companies backed by strong fundamentals. Investors should avoid narrative driven stocks.
Hindustan Times
2 days ago
- Business
- Hindustan Times
Indian benchmarks snap 3-day losing run as Reliance, HDFC Bank gain
Indian benchmarks snapped a three-day losing streak on Tuesday, driven by bargain buying in heavyweight stocks such as Reliance Industries and HDFC Bank, with gains in infrastructure major Larsen & Toubro ahead of its earnings helping. Reliance Industries and HDFC Bank, among the top three heaviest stocks on the benchmarks, rose 2.1% and 0.7%, respectively.(PTI/Representative) The Nifty 50 rose 0.57% to 24,821.1 points and the BSE Sensex added 0.55% to 81,337.95. The benchmarks fell about 2% in the last three sessions due to fading hopes of an India-US interim trade deal, weak earnings and sustained foreign outflows. All 16 major sectors rose on the day. Heavyweight financials, which fell 0.5% earlier in the session, closed 0.3% higher. The broader mid-cap and small-caps rose 0.8% and 1%, respectively. Reliance Industries and HDFC Bank, among the top three heaviest stocks on the benchmarks, rose 2.1% and 0.7%, respectively. "It is likely that we are seeing some buying after the drop in the last three sessions. But one should not read too much into today's move because there is still uncertainty over what will happen on August 1," said Sunny Agrawal, head of fundamental equity research at SBICAPS Securities. Negotiations between India and the United States remained deadlocked, with Trump saying on Monday that most trading partners who do not negotiate separate deals would soon face tariffs of 15% to 20% on their exports to the U.S., well above the broad 10% tariff he imposed in April. Analysts pointed to a flurry of stock movements due to an earnings-heavy day. Infrastructure major Larsen & Toubro, which is due to report first-quarter results later in the day, added 2.1%, and Asian Paints jumped 1.8% after it posted a first-quarter earnings beat. Electronics equipment maker Hind Rectifiers and electrical components maker Apar Industries surged about 20% and 12%, respectively, following strong earnings.
Mint
3 days ago
- Business
- Mint
NSDL IPO: Reasonable valuation, strong moat, and room to reclaim growth
National Securities Depository Ltd (NSDL), India's first depository and a vital pillar of capital market infrastructure, is set to launch its ₹4,012-crore initial public offering on Wednesday. The offer-for-sale (OFS), priced between ₹760 and ₹800 per share, marks a critical milestone for the 28-year-old institution as it navigates shifting dynamics in the country's fast-evolving demat landscape. Founded in 1996 and registered with the Securities and Exchange Board of India as a market infrastructure institution, NSDL provides core services such as demat account maintenance, transaction settlements, record-keeping, and corporate actions. It also has two key subsidiaries. NSDL Payments Bank focuses on business-to-business and financial inclusion services, and NSDL Database Management Ltd offers e-governance, customer verification or know-your-customer (KYC), and insurance repository services. NSDL Database also runs SEZ Online for transactions related to special economic zones, which are tax-free and export-focused enclaves. As of March, NSDL serviced 99.99% of foreign portfolio investor (FPI) assets in demat form and held 86.8% of the country'stotal demat value. Its reach spans 99.34% of Indian pin codes and 194 countries. Yet, even as NSDL remains a critical cog in India's capital market machinery, it is confronting a shifting landscape—marked by rapid retailparticipation, fintech disruption, and increasing competition from its younger rival, Central Depository Services (India) Ltd (CDSL). Revenue streams In 2024-25, NSDL posted consolidated revenue of ₹1,420.1 crore. Of this, banking services contributed ₹719.9 crore, or 50.7%, depository services accounted for ₹618.6 crore, or 43.6%, and database management services added ₹81.6 crore, or 5.75%. NSDL's profitability is skewed heavily towards its core depository services function, which contributed ₹310.6 crore, or 91.3% of total profit. Banking brought in just ₹3.66 crore (1.08%). 'While a significant portion of NSDL's revenue comes from its payments bank services, this contributes negligibly to overall profitability due to thin margins (about 0.5%) and high operating costs," said Ranjit Jha, managing director and chief executive officer, Rurash Financials. Despite the lopsided profit mix, the business model offers resilience. 'NSDL posted strong growth, driven by operating leverage and a stable, annuity-like revenue model largely from recurring custody and depository participant fees," said Sunny Agrawal, head of fundamental equity research at SBICAPS Securities. 'This provides insulation from market volatility. It also earns from software licensing and RTA (registrar and transfer agent) services." Institutional stronghold Over the years, NSDL has maintained a dominant market share in terms of the value of shares held in demat accounts. In FY25, it settled ₹103.2 trillion worth of securities, translating to a 66.03% market share. CDSL, in comparison, handled ₹53.1 trillion with a 33.97% share. NSDL's strategic focus on serving large investors and FPIs has ensured its stronghold, although its peak 81% market share in FY19-20 has slipped to 66%. 'For NSDL, it's value over volume," said Vaqarjaved Khan, senior fundamental analyst at broking firmAngel One. 'It serves institutional clients such as mutual funds, insurers, and government entities. The company is expected to invest over ₹100 crore in FY26 intech upgrades, targeting deeper penetration into areas like NPS (national pension system), ETFs (exchange traded funds), debt, and unlisted assets." Jha added that the different trajectories of NSDL and CDSL are more about strategy than efficiency. 'NSDL targets institutions, while CDSL focuses on retail and discount brokers. Both models cater to different segments and work in parallel," he said. Valuation: A reasonable ask NSDL's IPO comes at a relatively reasonable valuation compared to its listed peer. At the upper end of the price band, NSDL's price-to-earnings ratio stands at 46.6x for FY25, down from 58.1x in FY24 and 68.1x in FY23. CDSL, by contrast, trades at 68x earnings, making NSDL's IPO more attractively priced for long-term investors seeking exposure to digital financial infrastructure. 'IPO valuation on FY25 earnings appears fair given limited competition, a structural moat, and a high-value institutional client base," said Khan. 'Over the long run, value creation will depend on tech adoption, scalability, and diversification into other institutional products." NSDL vs CDSL Still, the growth differential is noteworthy. Over the previous three fiscal years, NSDL's revenue has expanded at a compound annual growth rate of 17.9% and its net profit at a CAGR of 20.9%. CDSL's revenue expanded at a CAGR of 32.02% and its profit at 38.10% over the same period. 'While CDSL has more demat accounts, it doesn't imply a more efficient model. Both depositories operate similarly, offering demat, transaction, and record-keeping services," said Jha. 'The key difference is their client base—CDSL caters to retail and discount brokers, leading to high volumes but lower custody per account, while NSDL serves institutions, resulting in fewer accounts but higher custody value and profitability. The variance stems from target segments, not structural efficiency," he added. CDSL added 32.61 million accounts in FY24 and 37.37 million in FY25. NSDL added only 4.31 million and 3.68 million, respectively, in FY24 and FY25. CDSL's success stems from early fintech integrations with digital broking platforms Zerodha, Groww, and Upstox. 'CDSL's lead in retail is driven by a cost-effective model and early integration with fintech platforms," said Agrawal of SBICAPS Securities. NSDL, however, is now making up for lost time, accelerating fintech tie-ups, onboarding retail clients through platforms like CCAvenue and Spice Money, and adding over 9,000 demat accounts daily, he added. However, regaining its market share will require more than just current initiatives. 'To regain the lost market share to the competition, NSDL needs to strategize their business focus on the retail segment. This can be done by increasing their engagement with new-age fintech brokers and introducing a new pricing model tailor-made to appeal to the fintech brokers. However, this depends on the strategic plan the depository would like to adopt to regain retail market share," said Jha. Opportunities in a growing market The underlying market opportunity remains strong. India's demat account base grew from about 28 million in FY17 to 192 million in FY25, clocking a robust CAGR of 27.4%. While the pace may slow to an estimated 12% CAGR through FY27—taking the total to about 220 million—the structural trend remains intact: a deepening equity culture, greater retail participation, and rising financial literacy.
Economic Times
3 days ago
- Business
- Economic Times
Kotak Bank falls over 7% on disappointing Q1 results
Mumbai: Shares of Kotak Mahindra Bank fell over 7% on Monday, their highest single-day fall in 15 months, after the bank's first-quarter results disappointed investors. Analysts see 2-30% upside in the stock from these levels. The stock ended at ₹1,968.7, down 7.3% from Friday. It was the worst performer on the benchmark Nifty, which fell 0.6%. Macquarie has maintained its 'neutral' rating for the stock, and has a target price of ₹2,300. The brokerage said the bank's credit costs were in line with the third-largest private bank and double those of the top two private banks, which is surprising given the bank's historically strong underwriting practices. ADVERTISEMENT Kotak shares have declined 9% in the past month, against Nifty Bank's decline of 2.1% in this period. SBI Securities estimates the fair value of stock at ₹2,000-₹2,050 over next 12 months and suggests buy-on-dips approach. "Loan and deposit growth remains steady, and with the embargo on the 811 platform lifted and new product offerings in place, performance is likely to improve from Q3 onwards, provided there are no further rate cuts," said Sunny Agrawal, head of fundamental research at SBI Securities. In February, the RBI had lifted the restriction on opening new bank accounts digitally via Kotak 811 platform, after a ban was imposed in April 2024. Nomura has a 'neutral' rating, with a revised price target of ₹2,150. "Kotak's results in Q1FY26 were soft, led by asset quality deterioration and a sharper decline in NIMs. Slippages and credit costs were elevated at 1.7% and 1.2%, respectively," said brokerage Nomura's analysts.
