Positive on metals; supercycle is here to stay: Motilal Oswal AMC

Motilal Oswal AMC continues to remain positive on metal companies, Manish Sonthalia, head equities-portfolio management services (PMS), told CNBC-TV18. Sonthalia also said that the supercycle in metals is here to stay.

“This (metals) is one sector which moves in cycle and today we are in upcycle. So, I would go with the producers; the metal companies would be bigger beneficiaries and for once, the users of the metal commodity will have to take the hit on the raw material cost. Prices will have to be hiked. Therefore, the supercycle on metals is here to stay,” he said.

Sonthalia expects the Indian equity market to continue to trend higher. According to him, the Q1 of FY22 earnings will be the next trigger for the market.

On the IT sector, he said, “The tech story has not played out at all. I would believe that all IT companies would have serious tailwinds going for them for the next 3-5 years.”

“All of the housing finance companies are likely to see good demand coming in and that is what I gather from the ground. June is looking up in terms of demand traction on affordable housing. So, there is some activity in terms of demand pick up and it’s a case of a buy as valuations are comfortable across the board,” said Sonthalia.

Sonthalia remains underweight on the consumer staples sector even though the sector has done well in the past decade. His stance regarding the sector is primarily due to lofty valuations.

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