Manish Gunwani, Head of Equities at Bandhan AMC, sees power as a promising sector among public sector undertakings (PSUs). However, the defence sector looks expensive.
There has been a sell-off in PSU stocks over the last few sessions with over ₹5 lakh crore of investor wealth wiped out in just three sessions, after lower-than-expected earnings for the third quarter of FY24 from a handful of PSUs and stretched valuations led to profit booking.
Gunwani also prefers autos, particularly passenger vehicles (PVs) and two-wheelers, but is less enthusiast about commercial vehicles (CVs).
Discussing auto space, Gunwani said, “Global auto also, last 3-4 years post-pandemic, the recoveries in Europe, China etc., have been weak. So, you can expect that at least we are not buying something at the top of the cycle. So yes, auto in general is an interesting space at this point of time.”
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In January 2024, India's automotive retail sector experienced strong growth, as reported by the Federation of Automobile Dealers Associations (FADA) on February 13. All vehicle categories saw notable expansion, with a 15% overall increase in market activity. Particularly, two-wheelers stood out, leading the surge with a 15% growth.
Also Read | India sells record 3.93 lakh cars in January, two-wheeler demand steady on rural boost: FADA
Following closely behind were three-wheelers at an impressive 37%, passenger vehicles at 13%, tractors (Trac) at 21%, and commercial vehicles at a modest 0.1%.
According to the auto retailers’ body, demand for two-wheelers remains steady on the back of continued strength in the rural market. This segment is likely to benefit from the government's good crop production estimates and continued support for the rural economy, it said.
Gunwani beileves investors can take some bets on the divestment theme because if the election outcome is favourable for the market, there is some basis to say that a lot of the strategic divestment, which didn't happen in the last term (of the current government), can come back.
For the entire interview, watch the accompanying video
(Edited by : Shweta Mungre)
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