For rest of FY25, capex likely to move up and emerge as a significant trigger for market: Vinit Sambre
Vinit Sambre, Head-Equities, DSP Mutual Fund, says the visibility of good growth, cash flows, ROEs going forward over the next one or two years is going to get rewarded as there is an overall slowdown in the earnings. Within each category, it is going to be pretty stock specific because there is a significant divergence in the performance across the same categories across different companies. There is a good outlook on the consumer discretionary category as cyclical recovery should see that category doing well going forward. Sambre is positive on the banking sector and says the IT sector looks decent. He likes QSRs and says consumer discretionary is something they believe in long term.
Sambre says there are sectors like utilities, and some engineering companies, which are trading at expensive valuations where he is a bit more wary about taking high exposures.
What explains the market mood that we are in and when do you expect a reversal of sorts? Is it likely to happen in a few weeks or is it a matter of a few months before we see a resumption of the uptrend?
Vinit Sambre: When we look at the markets over the last couple of weeks, there is good weakness which has happened.
If we just focus on over the last two-three years, the last three years we have had a good 20% kind of earnings growth for the corporate sector. And starting the last couple of quarters, we were seeing weakness and this quarter has been an exception where the downgrades have really started.
Already we are seeing some 7-8% kind of downgrades which are happening across the Nifty and clearly for FY25, there is an expectation of a low single-digit kind of a growth estimate.
