Looking for value? Sunil Subramaniam is gung-ho on infra and cement
Sunil Subramaniam, MD & CEO, Sundaram Mutual, says “it is largely the infra play. If you look at it from a classical earnings PE ratio, it is definitely looking rich in valuations because a lot of the price is from the order book and from the future growth. So that is one sector where I see value. The other sector where I feel some value is creeping in is cement.”
Where is it that you are seeing pockets of overvalue and undervalue in the market, if at all?
It is very hard to say.
I am seeing that there is a lot of differentiation among companies within sectors. I would say that it is largely the infra play. If you look at it from a classical earnings PE ratio, it is definitely looking rich in valuations because a lot of the price is from the order book and from the future growth.
So that is one sector where I see value. The other sector where I feel some value is creeping in is cement. It had gone through a pretty bad phase earlier, and there was a lot of negativity.
Now the price correction and all what has happened there and we are seeing value in cement, actually. We have always been bullish there but I think there is some news on capacities and everything led the market feeling that the earnings would not support it but we feel that now it is undervalued.
Within the BFSI pack, PSUs are continuing to show a discount but I would not call that undervaluation. I would say that there is always going to be a discount for the PSU banks versus the private sector banks.
But relatively, the run-up there means that the valuations are fairly okay now. They are not undervalued or overvalued. Metals is a global cyclical.
I would say that it depends on the news abroad, the future earnings, because in metals, the pricing of London
