Indian equity benchmarks succumbed to selling pressure following a positive start on Friday, as Dalal Street entered a new monthly derivatives series after finishing the previous one more than four percent higher. Losses in IT, FMCG and consumer durable shares weighed on the market though gains in financial and oil and gas stocks lent some support.
Dhiraj Agarwal, Co-Head-Equities at Ambit Capital believes the market is trending up and it can go a little bit higher but it is broadly reaching a valuation that one shouldn’t get extremely excited about.
According to him, the market sentiment starts from disbelief and keeps on going down the quality chain. It is slightly unsustainable where people are not focusing on any quality and all kinds of stocks are moving up, he added.
Pramod Gubbi, Co-Founder, Marcellus Investment Managers India is seen as the most favoured market and economy to invest in.
“There are longer-term perspectives being built where India is considered as a more stable economy, more stable market to invest in from a private capital perspective and that flow will come irrespective of the valuations.”
He believes India’s super valuations to other emerging markets are justified by the better quality companies in the Indian index.
Gubbi further sees commodity price inflation as a bigger risk to India story. “People will see through the headline price to earnings multiple but more than the valuations, I would think the commodity price inflation is a bigger risk for the India story.”
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Agarwal continues to maintain buy call on Zomato and PolicyBazaar. “We always believe they were great businesses from a 10-20 year point of view. We continue to remain constructive and positive on both these names,” he said.
According to him, it is going to be a stock-pickers markets.
For the entire discussion, watch the accompanying video