Why Mahantesh Sabarad is bullish on ITC

economictimes.indiatimes.com:

ITC has been welcomed by the investors and the direction for the company will probably continue to remain positive, says Mahantesh Sabarad, Market Expert. Edited excerpts.We have seen a bit of a comeback in terms of inflation. Whether it is tomatoes, wheat prices, rice prices and of course sugar prices are also expected to inch higher. Does all of this put a bit of a question mark in terms of where inflation is headed. And do you think that is the nervousness that the market is dealing with right now? I think you are probably right.

But more than that, it is the nervousness related to inflation. \n. Although, we have had a very good July and the progress in August has been somewhat muted; it is not necessarily a dry August.

But we are likely to see the El Nino effect actually coming into play. If we want to end the season, which is by the end of September, with some kind of deficient monsoons we will probably risk a higher chance of a slowing economy. Inflation is a worry.

You would have noticed that the RBI has also talked about a bit of a higher inflation in this monetary policy. They have talked of a much higher inflation now in the second quarter of the fiscal year. We have to see that off.

So right now, we are seeing inflation trending up. The good news is it has come off a little low base. Remember May was one of the lowest of this sort of one year in terms of 4.3% print.

We are probably going to head to 6.2% kind of print by the time the quarter two comes in but that is not too much of a worry. We already have the RBI taken cognisance of that and I am a bit more worried about the monsoon forecast. A couple of IPOs that have done well from the names like Yatharth Hospital as well as Netweb, which saw a bumper