GST-guided consumption boost: Dabur, Marico, Trent, Cement Namur look promising: Rajesh Palviya

Kshitij Anand: Just let me get your perspective on the markets. Nifty and Sesex have not been moved much in the last 12 months. We see a flat to slightly negative return on the headline indices. So yes, straight up, where do the markets go? What do your graph patterns tell you?
Rajesh Palviya: It is almost 12 months since Nifty is still unable to make a new all time. So this time correction and price correction, we have already seen both in this market. If we analyze historically, this is the longest time correction we experience post-Covid. But yes, looking at the reforms that the government has implemented in recent months, that now gives us the confidence that Nifty is ready to go back to the all time high route in the coming months. The kind of recovery that we have already seen from the lower levels, the wider market also participates in this rally. Yes, worldwide headwind are still disturbing the market and traders and investors are a bit careful because of the news flow that comes from the world market. That is the only care at the moment. But otherwise things are very well placed and we believe that as soon as this global headwind cools and every regulation between trade rates or what measures the American/Trump administration is currently taking at a certain level, the market will probably make a new all time in the coming months.

Looking at the wider market, in particular the midcap space, the type of buying interest that takes place in domestic oriented sectors – blocks from real estate, BFSI, FMCG, consumption, cars – this all gives a sign that yes, the market is optimistic. As soon as we are able to break out more than 25,700, a possible target of 26,500-26,600 can be seen in December or January. On the other hand, 25,000 must be protected. That is the important level for Nifty.

We are currently focusing more on the consumption-oriented sectors. Cars are clearly better than performing. The type of buying interest that we witness the two-wheeler and the four-wheeler space clearly shows that with the tariff reductions in both segments, which have already been passed on to customers, the question will be stimulated and we can see a good traction in the car space. This is a sector where one can concentrate. On usable points: Hero Motocorp and Bajaj car are our favorite choices from the two -wheeler space, while Van Vierwielers, Maruti and Mahindra & Mahindra. These four supplies from the autosmes look strong.

Again, from the point of view of real estate, most shares have already been corrected. And in recent weeks many shares of signs of recovery have shown and pimples have already taken place. Stocks such as DLF and Oberoi Realty look more promising from the technical position. These shares can yield a good return in the future, so one can concentrate on that.

Kshitij Anand: And let me get your perspective on the recent burning problem in the IT industry, the H-1B-VISA. The main number has recorded $ 1 lakh annual costs imposed on some of these IT companies or the persons requesting the visa. At the reaction side we saw Adrs take a hit and then false on Monday morning. What would your advice be for someone who has it in his portfolio in his portfolio? If they are already winning, do they have to book them? And yes, if there is anyone for the long term, do they have to be underweight on some of these IT players because a headwind keeps mounting? We don’t see a tail wind for the sector. Worldwide growth problems were already a problem before and now the H-1B visa problem has come into play. What are your opinion?
Rajesh Palviya: Historically, when we look at it, they were supplies from rich vomic makers, but in recent years these shares have not yielded any returns to investors. Even this year we have seen around 25% correction in most IT shares. Again, a lot of headwinds are disturbing sentiment and most investors hold a cautious attitude.

AI is a different disruption that makes everyone wonder how this technology will shape, how IT companies will evolve and how they will get market share in terms of business activities. That is a factor. Another is the new visa costs that came in this weekend. But there was also clarity with this announcement that this applies to new visas. We have seen Post-Covid most IT companies work on an offshore model. Yes, for very important projects they have to use manpower in the US or other countries, but most things are done offshore.

With higher visa costs, they can try to hire sources locally – IT ingieurs who live in the US. Or instead of offshore, they can be on their way to the neighborhood, so that resources are hiring from countries close to the US. This could be a change to get the cost burden of the new visa policy.

I do not believe that there will be a lot of impact because most projects are delivered offshore and companies will try to pass these costs to the end user. In terms of profitability, I don’t think there will be a lot of impact – maybe 1% to 2% EBITDA pressure. But in general the sector is in a downward trend and such news again hurts the sentiment of investors. Investors still do not buy these shares because the clarity is missing. As soon as the clarity becomes available as soon as management comments are available in the public domain on the impact of this new visa policy and margin, then those who look at a longer perspective can use this decline as a buying option.

It is a core sector. Yes, there can be some pressure in terms of projects, margins and income, but for a long-term perspective, if there is a 3-4% correction of these levels, it is an opportunity for those who want to use capital in a sector where the prices are attractive and the time correction has already taken place.

Kshitij Anand: So, valuations look attractive.
Rajesh Palviya: Yes. They can look at some of the Midcap IT companies instead of making it bigger, because the pressure is more under the Largecap IT companies as they take more care of American projects. So the pressure would be on Largecap IT companies, but companies such as Coforge and Mhasis from the Midcap IT universe can be considered. Largecap, yes, shares such as HCL Tech or Wipro can also look attractive.

Kshitij Anand: So, so not necessary to panic at the moment.
Rajesh Palviya: Yes, no has to panic.

Kshitij Anand: Now, some word about the GST names – who could be the beneficiaries? You have already treated cars in your earlier conversation, but also from a consumption room, will you see in the coming years from a perspective of three to five -year perspective?
Rajesh Palviya: Many things will evolve post-gst because it will have a wrinkle effect on the economy itself. Consumption will at least remain an important theme for the next few months. So, stocks of the FMCG basket can be viewed. For example, Dabur and Marico look attractive. We have already witnessed a major correction in these shares and now they gradually show signs of recovery. So, Dabur and Marico can be considered.

Again, some of the themes on which we concentrate are New-Age shares, which can also be viewed at the moment. Zomato and Swiggy- These two shares also look promising and their technical structures are very strong from a perspective in the short to medium term. These two shares can also be viewed.

Even from the Consumption, Trent is available at a very attractive price. We have already witnessed underperformance and now the stock is available in a support area of ​​several months. Trent can be viewed from the consumption theme, and this stock is very favorable from a risk claim point of view. Here too there is a possibility that we will see a good Upmove in this counter in the future.

So many themes are taking place right now. Again, the cement basket also looks attractive. Here too we have seen GST. The cement basket looks promising and shares such as ultratech cement, grassim and ambuja cement can all be considered.

(Disclaimer: recommendations, suggestions, views and opinions of the experts are their own. These do not represent the views of economic times)

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