Positive on large private banks; overweight on cement, says Kotak AMC’s Shibani Sircar Kurian

Shibani Sircar Kurian, Senior Executive Vice President and Head-Equity Research at Kotak Mahindra AMC, spoke to CNBC-TV18 to put forward his views on the earnings.

On earnings of financials, Kurian said, “What is clearly evident is that there has been stress this time around primarily because of the COVID-related shutdown. The stress and the impact have been more on the retail segment which is where you are seeing most of the slippages coming through.”

“Now we are clearly seeing the signs of the corporate stress is under control. The restructuring has also been fairly benign. Our positioning on the banks is more focused towards the larger banks specifically the larger private banks which in the past had higher corporate exposures but now those exposures are well provided for.”

On pharma, she said, “Our positioning pharma has been pretty stock specific in nature. Among the larger pharma companies now valuations have caught up. The key issue in the past had been the US market and especially the pricing pressure on the US generic. At the margin, the pricing pressure has come down, but will the market and the companies have pricing power that remains to be seen.”

On cement space, Kurian said, “We are fairly overweight on cement. Our overall positioning has been towards domestic cyclical as a pack.”

“Cement is a play both on the household sector in terms of affordable housing as well as on infrastructure. This is also a sector which has undergone significant consolidation which has led t pricing power and that is visible this time around. We believe overall sector profitability should continue to improve as volume growth and demand outlook starts to improve.”

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