Commenting on the recent rise in Asian Paints shares, Maheshwari described it as a “trading bounce” rather than a sustained rally. “Yes, there are very strong volumes coming in. But in terms of value, a 10-10.5% increase in volume translates into only a 6.5% increase in value. The volumes are very good, but at the bottom of the pyramid, potentially impacting margins,” he said. Maheshwari cautioned against investing at current valuations, noting that “at 65 times it doesn’t justify having it in your portfolio. I think that’s true for most FMCG stocks.”
Consumption and growth game
Asked whether the market would continue to reward companies that maintain market share at the expense of margins, Maheshwari confirmed the growth story in India. “It has always been in India. India is a growth market. Whoever gives you that kind of growth, the market rewards it. All new-age consumer companies that push the boundaries in growth are rewarded. I continue to believe that growth is the way forward,” he added.
Healthcare sector: earnings momentum but selectivity required
Maheshwari noted the resilience in the healthcare industry, highlighting both strong profitability and revenue growth. However, he urged investors to be selective. “I don’t see a revaluation of the sector anymore. Valuations are already very high. But earnings momentum will continue to drive these stocks. 15-20% growth in the next two to three years doesn’t seem very difficult. You have to be selective now, maybe everything could have been bought two years ago,” he explained.
On sector calls, Maheshwari pointed to companies that have already completed capital investments and are in execution mode. “Apollo seems to be in a good place. They’ve really made the capital investments over the last two years and the stock prices have been sideways. Companies that are ready to execute are the areas I would go to within healthcare,” he said.
Data centers: an emerging opportunity
On data centers, Maheshwari described the sector as capital intensive with moderate returns. “Yes, Anant Raj is a good bet, but the investments are very high. The return on equity will not be excellent – maybe 14-15%. I would rather play it through picks and shovels: the EPC contractors, electrical contractors, those setting up the infrastructure,” he explained. He emphasized that while investments in the sector are still in their early stages and expected to grow from the current commitment of $4 to $5 billion, identifying the right beneficiaries is critical.
Maheshwari’s insights underscore a selective approach in the current market, favoring growth-driven companies and execution-ready players, while exercising caution in sectors with high valuations or high capital requirements.
#Healthcare #momentum #strong #selectivity #key #steep #valuations #Nischal #Maheshwari