Gautam Duggad
Indian stock market beat the estimates for the July-September quarter of FY23 as Corporate India financials played a big catalyst, said Gautam Duggad, head of research and institutional equities at Motilal Oswal Financial Services.
“The July-September quarter went slightly better than what we had anticipated and there are a couple of factors which drove it,” he said in an interview with CNBC TV18. “For example, we were expecting the Nifty earnings to stay flat. For the quarter, actual performance was better, and it grew by about 9 percent.”
At 10:30am on November 23, the Nifty50 index traded around 18,200 points with the Nifty PSU Bank index rising 1 percent, led by the Punjab National Bank, Canara Bank and Indian Bank.
Duggad shared his outlook for FY23 and said he expects nearly two-and-a-half percent earnings upgrade for the given period and a growth projection of 14 percent for the Nifty.
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Talking about the banking sector, Duggad mentioned that investors saw good performances from both public and private sector banks, at a time when global markets have been struggling on several fronts.
“And in a market, which is struggling on so many fronts… This (banking) is one segment which is still offering you the comfort of earnings visibility. So it’s quite natural to stay over there,” he said.
He also mentioned that PSU banks have ‘clearly outperformed the private banks’ over the last 12-18 months. He advised investors to remain cognisant, given the inconsistencies in the credit cycle of PSU banks.
“But one has to always remain cognisant of the PSU bank credit (cycle) because, generally, you’ve seen that consistency has been lacking in the past couple of years,” he said. “So this is a segment where you have to move quarter to quarter because this is not a long term investment.”
Duggad also said that he has had a cautious view of the Indian market in the last 12 months because, first, companies’ valuations do not present a clear picture of the situation and, second, markets have seen interest rates go up by about 200 basis points, in the interim.
