Gaurav garg
Gaurav Garg, Head of Research at CapitalVia Global Research, says the September quarter earnings season has been quite good, the revenue and profits were meeting the street estimates most of the times. “The banking sector has done well among other industries and this season seems to have more upgrades than downgrades.”
Gaurav, who has more than 10 years of experience across industries, expects the markets to rise in the upcoming sessions after the recent healthy correction and a good amount of consolidation. “However, the momentum of the markets may be arrested a bit because of the upcoming festive season in global markets.”
Edited excerpts:
Do you expect the market to consolidate now – till the Union Budget 2022 and state elections (Punjab and UP)?
We expect the market to rise in the upcoming sessions after it has seen good healthy correction and a good amount of consolidation as well. However, the momentum may be arrested a bit because of the upcoming festive season in the global markets. The state elections may have some impact but we believe that these state elections may not be significant to consolidate markets for long. The Union Budget will, however, be a major factor defining the market direction, however, we expect the market to start moving before the Budget itself.
Do you think macros & micros both are firing on all cylinders?
The markets are indeed reacting to both micro and macro cues. The quarterly earnings of the companies have indeed played an important role. On the macro front, the US Fed and bond yields also have been a major reason in the movement of markets.
We are at the fag end of September quarter earnings season. What is your reading on the earnings?
The September quarter earnings season has been quite good, the revenue and profits were meeting the Street estimates most of the times, the banking sector has done well among other industries and this season seems to have more upgrades than downgrades.
Have you seen any big risk pointed by the September quarter earnings season? What are the other risk factors that one has to be aware of now?
The recent times in the market has signalled that the abundant liquidity in the markets may reduce if the interest rates by the central banks, especially US Fed are hiked. The rising bond yields in US may led to reduced FII inflows in the country.
Have you spotted sectors/themes that one has to consider for portfolio now or continue holding in portfolio, after the September quarter earnings season?
In the September quarter earnings, Banking, IT and realty sectors seem to have fared well. Banking sector has seen improved asset quality and growing its margins, with the telecom relief and the NARCL announcement stocks in this space (especially PSU Banks) have seen good traction. Investors may hold these stocks in their portfolio.
What are the key reasons for low subscription in Paytm IPO and will it impact its listing? Is it a portfolio stock despite tepid subscription?
The Paytm IPO was oversubscribed by the retail investors, however, from the start of the subscription, the lag was on the institutional investors front. The payments space is highly competitive and still evolving, the main driving force of this space is technology which at times may be costly and with such cut throat competition betting on Paytm becomes slightly difficult. Huge outflows in this segment goes into marketing and customer acquisition therefore the future prospects are not very clear. The GMP of the stock is quite low and therefore listing is expected to be mostly at par. This stock can still be held in the portfolio. Rising revenue (up by 46 percent to Rs 948 crore in Q1FY22, from Rs 649.4 crore in Q1FY21) seems to be promising and is expected to provide decent returns in the upcoming periods.
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