Core economy sectors like banks, some of the other domestic sectors like materials, some infra names should start looking up and that’s the side of COVID impacted stocks that we will be focusing on. CLSA’s fundamental opinion is that the beta part of the rally is largely done and now it’s more towards sector rotation and that’s the interesting trade. Nifty is very close to the highest valuation multiple. 2020 was about COVID impact, next year will be about recovery.

Share Market Live

NSE

Vikash Kumar Jain, Invest Analyst-India Market at CLSA

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In Q3 we expect earnings to grow just 10 percent now. Q2 has been one of the best earning seasons so far. In the Motilal Oswal coverage universe, the company has seen a 16 percent profit growth against an expectation of 7 percent decline. So all-in-all it is a 25 percent earnings beat on an aggregate level.

Every single stock in cement sector has beaten our expectations, volumes are stable, more importantly there was a very strong price discipline that we saw in cement, you also saw cost control. With things opening up, construction coming back, affordable housing, infrastructure execution picking up, the possibility of buoyancy in cement volume can continue.

Gautam Duggad, Head of Research, Institutional Equities of MOFSL

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Stock specific opportunities prevail in midcaps and smallcaps. A few strong companies will be participating in broader market rally. Aviation saw sharp uptick as it's seen as a safe mode of travelling during pandemic. Real estate is picking up on the back of lower interest rates.

Tushar Pradhan, CIO of HSBC Global Asset Management (India)

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We saw more earning upgrades than downgrades. So across the board if you look at FY21 and FY22 earnings estimates for Nifty companies, earnings have been upgraded. This was a good quarter. The expectation is that we will start seeing recovery even in terms of the revenue growth trajectory. Companies used this COVID-19 period in terms of repairing their balancesheet. With interest costs coming down, overall cashflows have seen an improvement. Over the next few quarters we will continue to see the earnings momentum keep up. Market has become more bottom-up in nature.

Shibani Sircar Kurian of Kotak Mahindra AMC

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The economy has been a lot more resilient. Companies have managed to rejig their supply chains and even get back on track of production really quickly. So, all that means is that we are starting to see an earnings upgrade cycle. As of now it looks like whatever provisions the banks have made seem to adequately reflect the eventual amount of NPAs and credit cost. So, if that is the case, we could probably see one digit upgrades coming in.

Sanjeev Prasad, MD & Co-Head, Kotak Institutional Equities

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We are beginning to see a little bit of uptick on COVID-19 claims. It is still within our assumptions. Growth in the business is not at all linked to the festive season. Insurance is a long-term protection, savings and retirement solutions kind of an outlay that one would have. October has been one of the best months for the company.

Vibha Padalkar, MD and CEO at HDFC Life Insurance Company

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The Q2 has been redeeming for us and demand really galloped for us especially in the months of August and September and the whole second quarter we delivered double-digit volume growth which was unprecedented in these times. The demand in tier II-III-IV cities is still bullish. However, people are wary of a second COVID peak.

Amit Syngle, MD & CEO, Asian Paints

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Underperformance of pharma over the last three-four weeks could come back to the fore and in this, my top bet always remains Dr Reddy’s Laboratories (DRL). Gland Pharma is a good company, worth looking at but the pricing at which the IPO was done, not much was left on the table for investors who applied for listing gains. Right now with the ITC stock having gained some traction over the last few days, it is distinctly possible it will move up another 5-10 percent.

Mehraboon J Irani, MD and CEO, Gini Gems Consultants

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We have reached 93 percent of pre-COVID levels in volume in the CNG segment. Because of social distancing people are preferring their own car. The private car conversion is very high. During pre-COVID around 5000 cars were getting converted in a month whereas today it’s going more than 7000 and by end of November it will be touching 10,000. In oil makreitng companies (OMC) operated stations, the revenue share is 60 percent for OMCs and 40 percent for IGL. Will take some time to finalize increase in trade margin as asked by OMCs.

AK Jana, MD, Indraprastha Gas Ltd

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We have a resilient business and launches are in the pipeline. There are not many players in the business-to-business (B2B) injectable industry. Going forward, growth will be in line with last year's performance. The company is doing well in Africa, Brazil, and Canada and filing new products in all geographies.

Srinivas Sadu, Managing Director, Gland Pharma

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The deal with Blackstone is work in progress. There is a lot of regulatory stuff that needs to get done and while that is happening we will also be cleaning out the entire due diligence process, which is almost done. Therefore, with all of this the deal should fructify in mid-December before Christmas. There is demand for all products, ready and under construction.

Plotted development is plotting and selling land. The only value addition is infrastructure and creation of amenities like clubhouse and common area. It’s for residential (purposes).

Irfan Razack, CMD, Prestige Estates Projects

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The ‘Aatmanirbhar Bharat’ plan of government of India is propelling a big boost in the Indian defence industry. We are quite optimistic. This gives a great opportunity for the Indian defence to plan for much bigger role and also plan for big expansion. The company has got orders of Rs 5,000 crore in the first half of this year. We are in a very advanced stage of negotiation for another Rs 8,000-9,000 crore. We are confident that this year also, we will acquire orders in excess of Rs 13,000-15,000 crore.

MV Gowtama, CMD, Bharat Electronics Ltd

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We do expect a gradual and a sequential recovery in our businesses. We see that some of the projects, which were put on hold during the period of lockdown, are now getting ready for execution, which is a promising sign. I do expect a fair amount of pricing benefit as the emission standards are being implemented.

Ajay Patil, Chief Financial Officer, Cummins India

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Electric arc furnace steel is the way to go. Its green steel, low carbon dioxide emissions. You will not hear a new blast furnace coming, but you will always hear some new electric arc furnace coming up in the world. So we think that once this COVID situation corrects, there should be revival in demand.

Manish Gulati, ED, HEG

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In the September quarter we have reviewed our projects profitability and timelines for completion. In the last 6 months period we have incurred additional cost because of COVID. The revenue has also been impacted in terms of volume of operations that we carry out. There is going to be an extension of time also that will be required for completing these projects.

Prasad Patwardhan, CFO, ITD Cementation

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We are trying to diversify the market so that we are able to sustain volume. Domestic sector has reached pre-COVID levels in Q3. Whereas exports discretionary segment is getting ramped up on quarter-on-quarter (QoQ) basis and will take 2-3 quarters to reach pre-COVID levels. Export demand is seeing 10 percent decline on a year-on-year (YoY) basis.

Rajendra V Gogri, CMD, Aarti Industries

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We need footfall of 1,000 per day to break-even at each park and we are hopeful that footfalls will come back soon. Wonderla’s monthly expenditure across the 3 parks is around Rs 5 crore currently and the company managed to cut costs by 70 percent. We opened parks on trial basis to see people’s preferences. However, we need at least 6 months to analyze consumer trends.

Arun K Chittilappilly, MD, Wonderla Holidays

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2020 was a fantastic year for gold and silver investors. So when you have this kind of news coming in, there would be some sort of profit booking coming to picture and that is something which we are already seeing. We will have to see how the ETF data pans out at the end of the month, but we are surely seeing some sort of profit booking by investors who probably bought at lower levels.

Chirag Sheth of Metals Focus

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We continue to like Hero Motocorp as our top play and a lot of the ancillary stocks will also start doing well. Both have domestic as well as export presence and we are positive on names like Endurance Technologies, Balkrishna Industries. For auto portfolio, look at Maruti from the passenger vehicles and M&M from the tractor side, Hero Moto from the two-wheeler space and a couple of ancillaries like Endurance and Balkrishna.

Rahul Arora, CEO, Nirmal Bang Institutional Equities

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We have been consistent on our store size and our store plan. Our expansion plan continues and we would definitely want to open up more stores in the coming year and even this year. We have initiated our omnichannel portal. We have started getting good traction there. The traction was more during the lockdown and high pandemic period but right now when markets have opened up, people are once again going back to their normal brick and mortar physical shopping behavior.

Lalit Agarwal, Chairman & Managing Director, V-Mart Retail

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