Aman Chowhan, Abakkus Asset Management gets you a portfolio call in which sector to invest on CNBC TV18. Watch the full interview here.
The month of October started strong for Indian markets, continuing the trend seen in September. However, in a volatile environment, all gains of the first half of the month were given away and markets ended almost flat for the month. Nifty 50 marginally outperformed broader markets, but huge disparity in stock performance was seen in the broader markets. Globally too markets were volatile but stable. Concern over China’s debt-ridden major property developer Evergrande subsided, on meeting their interest payment due date and aided global sentiments.
Results season so far has been a mixed bag. With input prices rising, many companies were unable to completely pass on this and bore the impact on its margins while some benefitted from it. However, revenue growth has been very strong, negating the margin compression and aiding a strong profit growth. This was in line with our expectations that we have been highlighting in our recent past communications.
Led by pent up demand and ease of covid restrictions, all lead indicators are pointing towards a bumper demand in the forthcoming festive season and companies seem to be well prepared to capitalize on this. We feel there is an upside risk to the demand, but at the same time there can be margin/earnings surprises owing to the input price inflation, energy costs and logistics costs. With a slew of large IPO lined up, near term liquidity is likely to get absorbed by the primary markets. These factors are near term temporary headwinds. We also believe that any interest rates rise would at worst be marginal and gradual and would not impact equity markets meaningfully. With growth tailwinds and positive earnings trajectory, we continue to be optimistic on the markets.
It’s said that pictures say more than a thousand words. The enclosed 1.083 version of “What We Are Seeing” will bring to you few charts and pictorial research.