Mahesh Patil, Chief Investment Officer at Aditya Birla Sun Life AMC, anticipates marginal slowdown in earnings growth to low teens in the next financial year.
However, he believes a bulk of this earnings expectation is already priced in and therefore, they may not be any major earnings downgrades.
"There could be some downgrade because the top line growth what we've seen in the last quarter could slightly be lower than what one is expecting. And the margin recovery that was driving the bottom line, to some extent, is now fully there now; one should not expect any further margin improvement because the commodity price benefit and other things is largely been through," he noted.
Patil says the current market is one where it's better to buy when prices fall rather than sell on declines.
On March 18, the Nifty dropped to 21,900 but bounced back after finding support at this level, which has been consistent for the past four trading sessions. It closed above 22,000.
The index has also maintained its 50-day Moving Average at 21,909, suggesting that 21,900 is a crucial support level for the Nifty in the future.
Patil also shared his views on various sectors including fast-moving consumer goods, cement, IT, among others.
FMCG will bank on a recovery in rural economy post elections, he said.
Cement sector might take a breather after the strong growth over the last couple of years.
Commercial vehicle (CV) sector is also likely to remain subdued.
Patil said the IT sector is one where there are expectations of a rebound into the next fiscal year, but it might take a quarter or two to see a meaningful recovery.
The global brokerage firm CLSA, in its recent report, has restated its careful approach to the IT industry. The firm has advised selling stocks of Wipro, HCL, TCS, and LTIMindtree. It also noted that the rate of new deal announcements in the current quarter has decreased compared to the periods of July to September and October to December in 2023.
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For the entire interview, watch the accompanying video
(Edited by : Shweta Mungre)
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