Jitendra Gohil, Head-India Equity Research at Credit Suisse Wealth Management is of a clear view that it would be in interest of all the stakeholders to have three player market in the telecom space.

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To have a three player market, we need address the debt situation of the sector and need to see how the tariffs play out in the course of time, he said, adding that they were positive on the space as a whole. " Given that data prices in India are very low compared to the global averages, prices will go up, which in turn will help the cash flows of these companies."

Speaking on impact of Coronavirus on markets he said, "India is sort of an outlier because its exposure to global market is relatively low and we are largely a consumption driven economy." Moreover, oil prices have fallen, which is again beneficial for India in the long term. Rupee has been pretty stable and FPIs are buying Indian equities despite growth slowdown, he said.

However, certain sectors would be impacted due to the Coronavirus, for example some chemical companies that import from China. There are some white good manufacturers like air conditioners where we are almost 75 percent self-sufficient but we still import compressors largely from China, so would see certain supply disruptions.

However, because of the Chinese lunar New Year most of the companies had restocked inventories in advance, so till February end or March second week they will be largely covered. If the virus outbreak were to last post March then these companies might see more stress on the cost front."

"Overall, the house is neutral on India currently and are expecting more flows to come in," said Gohil. "We are in a wealth management industry and generally look at structural plays. We advise our investors to look structural stories. We are very positive on the urbanisation story in India," he said.

"We think premiumisation trend is going to continue. For example multiplex plays where we do not see any slowdown," he added.

Although consumption slowdown is talking place in India it is largely seen in rural consumption than urban. Therefore, we are recommending our investors to look at certain sectors where there is a huge consolidation for example jewellery businesses etc, he said.

The second structural story is on the chemicals, he said. "We are looking at certain chemical companies which are raising capital to invest in their businesses, invest in their capacities and gain market share in export business. Moreover, import substitution is also taking place in India, so, urbanisation, chemical stories are better placed," he noted.

The third structural story is the microfinance sector. "There the story is still not completely exploited and there is more headroom for growth. Growth is expected to be solid at around 25-30 percent and delinquencies are under control," he said adding that these were the 3-4 sectors the house was positive on and were recommending them to investors.

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First Published:Feb 19, 2020 5:44 PM IST