Sunil Subramaniam is betting on consumption and banking this year. Here' why
Sunil Subramaniam, MD & CEO, Sundaram Mutual, says PSU banks are an exception to the whole PSU story, because they are in effect going to finance the whole capex cycle and be the vehicle of government dispersal. “Among PSU banks, I would still go for good quality banks, not an issue, but as for other PSUs, it will be to some extent stock specific but bearing in mind that a low PE and a liquidity have been the causes for the rally there, I would exercise caution in terms of jumping into them unless I get a clear signal that there is going to be a strong EPS growth independent of all of this.”
The earning season so far, what do you make of it and the kind of reactions or the exaggerated moves that we are seeing on stock price?
Sunil Subramaniam: It has been tepid so far and it is early days though, let us not draw any conclusions.
But what has come out so far has not been up to expectations. So, we will wait and watch over the next two weeks.
I think we will get more clarity. But the initial numbers reported have not been as great as expected, especially vis-à-vis consensus.
On an overall number, there could be earnings growth and all of that but the market had expected a certain festival season and related bounce which is not yet visible. We will wait and watch.
But as far as the banking earnings are concerned, two-three private banks have reported earnings. What do you make of it? Do you think this is the beginning of the downgrade cycle as such or is it too early to draw any conclusion on the private banking universe?
Sunil Subramaniam: The downgrades have already happened from a stock price perspective.
