Vaibhav Sanghavi, the co-CEO of Avendus Capital Alternate Strategies, shared his expectations for the FY20 earnings growth and views on the auto space.

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"On FY20-21 basis, we expect the relative certainty of reasonable earnings growth is high and we do expect that it will be led by banking and financials," Sanghavi told CNBC-TV18.

“We are at about 15-17 percent earnings growth as against the street which is upwards of 20 percent, but even if 15-17 percent happens then it will be a great number,” he added.

Talking about the corporate banking space, Sanghavi said, “It would be a mixed quarter for them because we do not know which one would be in for kitchen sinking because of the new management, but that would temporarily one-quarter phenomenon.”

“I do expect, given the last 3 or 4 years where we have seen massive cleanups, it may be just an aberration of one quarter and we are very constructive on corporate banks on a longer-term basis,” he said.

On the auto sector front, Sanghavi said, “We did an interesting analysis on the pre-election and post-election period of 6 months and we tried and mapped auto sales numbers. We have always found that there is generally a good recovery post-election period.”

“Having said that this time it’s a combination of liquidity tightness as well into the system which aided this whole kind of weaker auto sales numbers. Once the numbers are so low definitely the operating leverage kicks off on the negative side as well. So you might see some amount of margin pressure coming on to the whole pack and because of which the numbers maybe slightly weak, but given that the interest rates are coming down, liquidity is getting back into the place, post couple of months we might be constructive on this space,” Sanghavi added.