homevideos Newsmarket NewsDomestic facing economy sectors expected to do well: Motilal Oswal AMC’s Susmit Patodia
Domestic-facing economy sectors expected to do well: Motilal Oswal AMC’s Susmit Patodia
Susmit Patodia, Associate Director & Fund Manager at Motilal Oswal AMC on Wednesday said that markets have a very strong earnings momentum going into the next 3-4 quarters. According to Patodia, domestic cyclical sectors will do better than export oriented sectors over next 1-2 years.
Susmit Patodia, Associate Director & Fund Manager at Motilal Oswal AMC on Wednesday said that markets have a very strong earnings momentum going into the next 3-4 quarters.
“Stocks are salves of earnings and if markets are a congregation of stocks, then they are also slaves of earnings. If you look at the last two quarters, they have been phenomenal with respect to earnings. We have had decline in sales, but more than 20% growth in profits. It looks like even Q3 will be more than 20% growth in profits. Q4 obviously will be upwards of 40% because of the base and so will Q1. So, we have very strong earnings momentum built in for the next 2-3 quarters and hence this is really what I think is supporting the markets,” he said in an interview to CNBC-TV18.
According to Patodia, domestic cyclical sectors will do better than export oriented sectors over next 1-2 years.
“There is no doubt in our mind that the next 12-24 months the domestic economy facing sectors and companies will do much better than the western or export oriented sectors. That is where really our positioning is. Maybe after 6-7 years you finally have the Indian domestic economy doing better than its western counterparts,” he said.
He continues to be positive on insurance and pharmaceuticals.
“Over the last year and a half we have been speaking about insurance and pharmaceuticals. That does not change for us. Life insurance has gone through a tough last 6 months and you can already see growth coming back. So, I think that sector will continue to do extremely well over the next 12-15 months. Little bit of bad news from the Budget is probably already digested into the price and I think this sector is probably going to have great 12 months ahead. That sector remains the top pick,” he said.
He also expects a capex revival in India and said that companies exposed to fixed capital formation could see earnings coming back.
On flows, Patodia said that they are a backward indicator and FII flows into India have no signaling value. He added that it is important to look at redemptions as a percentage of Assets Under Management (AUM).
Watch video for more.
(Edited by : Aditi Gautam)
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