Aman Chowhan weighs the opportunities for investors in the real estate, chemical and automotive sectors

The Indian real estate sector is at an intriguing inflection point, with debt levels largely low and analysts suggesting the market may be approaching a peak. Aman Chowhan out Abakkus Asset in an interview with ET Now explained that markets focus more on sales velocity than profits when evaluating real estate companies. “Stocks will correct if sales slow down, irrespective of earnings growth. Debt levels have no impact on sales velocity, which depends on consumer sentiment. We prefer pan-India players as they are better insulated if some stocks weaken,” he said.

On second-quarter corporate earnings, Chowhan highlighted some sectors. Banking performed well, while the chemicals sector was a surprise, with some companies posting strong margins and growth. The car results were in line with expectations, without any major surprises. “Overall, earnings surprises came mainly from the chemicals sector and some unique companies,” he noted.

Regarding the two-wheeler industry and the recent VAT cuts, Chowhan pointed out that growth rates are better than a year or two ago. However, its portfolio avoids direct exposure to autos due to valuation concerns and Indian companies’ preparation for the EV transition. “We prefer auto components, which allows us to safely play on the growth theme. Auto metrics are likely to remain positive over the next four to five quarters,” he added.

Investors and analysts are closely watching the real estate, chemical and automotive sectors, weighing growth potential against valuations and market sentiment.