Pharma and banking sector thrives, cement demand lags, says Sunil Singhania
Sunil Singhania's insights offer valuable information for investors and business leaders, helping them make informed decisions in the current market landscape. Even though there are challenges in the cement space, the increased infrastructural spending presents opportunities for growth. Additionally, the pharmaceutical sector's rising penetration and affordability indicate promising prospects for domestic market-focused players. Moreover, the better-than-expected performance of the banking sector underscores its resilience and adaptability in a dynamic economic environment.
Even as India's infrastructure spending has shown a positive trend, with an increase of at least 8 percent, the demand in the cement space has not been as robust as expected, said Sunil Singhania, leading investment advisor and Founder of Abakkus Asset Management.
Sharing his sector insights in an interview with CNBC-TV18, Singhania touched upon various sectors, including cement, pharmaceuticals, and banking.
According to Singhania, the infrastructure spending has shown a positive trend, with an increase of 8 to 9 percent. This rise in infrastructural investments indicates a high demand for cement, as it plays a crucial role in construction and development projects. However, the demand in the cement space has not been as robust as expected.
“The challenge is that last three-four years, the demand has not been good and therefore even some incremental supply causes a little bit of imbalance particularly region wise. But if you are banking on the infrastructure spending that is happening at a rate of 8-9 percent in terms of demand annually, you need 120-130 million tonne of cement capacity in three years, which is not going to be very easy,” he said.
However, the pharmaceutical sector seems to be experiencing significant developments with increasing penetration and affordability of healthcare products.
Singhania highlighted that domestic market-focused players within the sector are better positioned to benefit from these trends. As the accessibility of healthcare improves, companies catering to the domestic market stand to gain a competitive advantage.
Singhania also expressed optimism about the performance of banks, indicating that they have fared better than initially expected.
“Sectors like banking, which we were expecting to do well have done better than what was anticipated,” he said.
This positive trend in the banking sector can be attributed to various factors such as prudent financial management, robust lending practices, and the overall economic growth trajectory.
For more details, watch the accompanying video
(Edited by : C H Unnikrishnan)
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