homemarket NewsAditya Birla Sun Life AMC sees decent earnings growth for IT, BFSI, auto and realty companies in FY24
Aditya Birla Sun Life AMC sees decent earnings growth for IT, BFSI, auto and realty companies in FY24
Mahesh Patil, Chief Investment Officer of Aditya Birla Sun Life AMC, shared his optimistic outlook for the fiscal year FY24, anticipating decent earnings growth. He emphasized the potential of the BFSI, automotive, realty, and capital goods sectors, which are expected to perform well with no major stress factors. Patil also highlighted the ongoing recovery of rural demand and its potential impact on the two-wheeler segment. Furthermore, he emphasized the significant upmove in global IT names, indicating a promising growth trajectory for the IT industry, surpassing pre-pandemic levels.
Indian equity benchmarks BSE Sensex and NSE Nifty 50 opened with gains, but gave up gains few minutes in the trade. The financial and telecommunication shares are in the red, dragging the headline indices lower. IT stocks on the other hand traded in the green.
According to Mahesh Patil, Chief Investment Officer of Aditya Birla Sun Life Asset Management Company (AMC), a notable earnings growth is anticipated in the upcoming financial year, FY24.
“We are seeing a fairly decent earnings growth in FY24. The markets should be steady,” he said.
In a recent interview with CNBC-TV18, he emphasised the sectors that show promising potential for growth and mentioned the positive developments in the IT industry. Furthermore, he discussed the ongoing recovery of rural demand and its potential impact on the automotive sector.
Patil identified the banking, financial services, and insurance (BFSI) sector as one of the key areas of focus for investment. Additionally, he highlighted the positive outlook for the automotive, realty, and capital goods sectors.
“We are pretty much focused on the domestic sectors in a big way, be it banking and financials, the auto sector, the industrial capital goods sector, the real estate sector, all the sectors are showing signs of improvement, we don’t see any major stress or slowdown over there,” he said.
Among the sectors showing positive momentum, Patil specifically mentioned the automotive sector. He noted that automobiles, commercial vehicles (CVs), and premium vehicles are performing well, indicating a healthy demand in the market.
“The commercial vehicles and the upper end of the auto sector like the premium vehicle – both in four-wheelers and two-wheelers, recovered early,” he said.
Highlighting the impact of the previous year's challenges, Patil acknowledged the slow recovery of rural demand. However, he expressed optimism about the future prospects of rural areas and their potential contribution to overall economic growth. Patil explained that as rural demand picks up, there will be a significant revival in the demand for two-wheelers, contributing to the growth of the automotive industry.
“Next coming months or next quarters or so, if the rural demand picks up, two-wheeler space will see a revival going forward. We are slightly constructive on the overall rural demand,” he said.
“We believe that as we move into the end of this fiscal year second half looking at elections next year – this is the pocket of the market where the government probably tries to do something and provides some stimulus, so I think that should aid overall auto sector going forward,” he added.
Discussing the global IT sector, Patil observed a significant upswing in recent times, especially over the past month. This surge in the IT industry's performance indicates the sector's resilience and its ability to adapt to changing market dynamics.
In line with the positive performance of the IT industry, Patil predicted that the growth in this sector would surpass the pre-pandemic levels. The increased reliance on technology and digital transformation across various industries creates a favorable environment for the IT sector to thrive.
“The overall spend on digital, which has started around two-three years back, will continue,” he said.
For more details, watch the accompanying video
First Published: Jun 1, 2023 1:48 PM IST
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