Here's why Abhay Agarwal is bullish on the manufacturing sector

economictimes.indiatimes.com:

«We see good opportunities in the pharma space, especially pharma generic exporter companies which have not performed well for many years. I think there are opportunities in the less popular sectors where money can be made over the next two to three years,» says Abhay Agarwal, Piper Serica.

Which stocks are you probably going to keep in the family for a long, long time? HDFC Bank used to be considered a part of that family jewel. You also had the likes of Titan, etc. But all of these defensives are under pressure right now. Do you think it is time to churn the portfolio? Or if you have a long view, should you just stick with them? What is your view?
Abhay Agarwal: Regarding HDFC Bank, and not just HDFC Bank but all private sector banks, this is not a buy or sell recommendation. We have not had HDFC Bank in our portfolio since January last year, once they announced the merger with HDFC Limited. The reason is that for large-cap private sector banks, the peak Net Interest Margin (NIM) is already behind us.

We see margin compression, the cost of deposits going up, and deposits themselves not increasing, so the cost of funds is rising. At the same time, there is pressure from the RBI to transmit rate cuts down to the borrower level. In that scenario, it is clear that for the next year or so, you will see margin compression and a slowdown in business until private capex picks up significantly. The credit offtake at the enterprise level will slow down. Considering all that, and looking at valuations which are still not