Better to hide in cash for next few months as earnings are not going to help: Andrew Holland
Andrew Holland, CEO, Avendus Capital, says it will be a margin story this earning season and the talk is on the pressure on margins and how that can be relieved. Holland does not think there is anywhere to hide at the moment. One can only hide in a bit of cash. So, increasing cash levels for the next few months would not be a bad idea given that earnings are not going to help. We have got the US elections and geopolitical problems plus, China is expected to do another stimulus. All of that plays badly for India in the short term.
Did you anticipate this kind of carnage on Bajaj Auto post its numbers?
Andrew Holland: It was not the numbers per se, it was more the commentary, wasn’t it? Whilst the festive season has picked up a little bit, it is nowhere near anyone's expectations. So, it has really thrown a damper on the whole market because we are all hoping or the market was hoping that the festive season would start to see a pickup in consumption and that is clearly not likely to happen now. On top of that, we anyway expected a weak earning season across the board. The market valuations does not support downgrades whether it is a company or the sector or the market overall. If the earnings continue like this, we could see another 5% correction from here.
Premium consumption has been doing well for a while, but over the last few months, the rhetoric hadd moved to mass consumption and rural consumption. But it seems to be now gravitating again towards premium consumption. What is your view on that?
Andrew Holland:
