The ongoing earnings season has panned out reasonably well so far barring a few disappointments, Naveen Kulkarni, head of research at Reliance Securities, said in an interview with CNBCTV18.com. He added that financials, consumer goods, and automobile were the key sectors which reported better than expected results. Edited excerpts:
What do you make of the optimism that markets have seen in the last few days?
The earnings season has panned out reasonably well barring a few disappointments. The global markets are also supporting a positive stance. The management commentary across the board has been cautious but also indicating the worst is over. Thus, markets will be in a constructive mode.
With markets already hitting all-time highs, what is your Nifty and Sensex targets for the year-end?
The Nifty target for April 2020 is 12,800.
Do you think foreign institutional investor (FII) sentiment has also turned around? Has that helped markets or the positive sentiment from the earnings?
Yes, FII sentiment is turning around and should continue to improve over the next six months as operating performance is likely to gain further traction.
What has been your reading of the earnings so far and which companies/sectors have stood out for you?
Financials, consumer, and autos were the key sectors which reported better than expected results. In consumer and autos, the margin performance was ahead of expectations while the key banks like ICICI, SBI, Axis, HDFC Bank and Kotak Bank reported healthy operating performance.
As an investor would you be tempted to buy telecom?
Telecom offers great value but will wait for more clarity on the incremental financial burden on account of the recent Supreme Court verdict on the definition of AGR .
What about metals, given the kind of rally we are starting to see across companies, what are your favourite picks? What is the reason for this rally?
Metal is impacted by global events more than anything else. At this point, there is limited clarity on how the global events will pan out and their impact on the sector. We do not have any preferred picks in the sector.
Is this a good entry point in midcap and smallcap with long-term investors? Or should investors stay with safe large-cap bets?
Yes, this is a good point for midcaps and small caps as there is limited upside in the largecaps.
What is your view of Yes Bank? With the stock rallying over 50 percent in just 1 month; should investors stay away or buy?
We await more clarity on the funding deals in the lender. Till then we will not advise buying Yes bank.
First Published: Nov 11, 2019 9:22 AM IST
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