Jagran Business brings you an exclusive interaction with Saurabh Jain AVP Research -Equities at SMC Global Securities. Shedding light to some market happenings and best sectors to invest he shares his views on future trail on the Market.
Saurabh suggests that while this current quarter was not strong enough for the Banking sector he believes the next quarter is expected to be better. This quarter the banks’ net interest profit is expected to go in bond deals and treasury losses. The bond yield in march was around 6.8 and has increased till 7.8 resulting in banks’ losses. For the upcoming sector, the big banks like ICICI, SBI & Bank of Baroda are expected to earn profits with the increasing net interest margin. However, for small banks the net interest margin is low.
As per Saurabh Jain, real estate sector is expected to be a good option. This sector the increased commodity cost resulted in losses due to aggressive sellings. However, big companies like DLF, Prestige, Shobha had strong pre-sales in March and the following months. The companies are also guiding that they’ve increased 2%-5% rates on per sq feets from time to time and the market is taking this positively. On the other side, the hotel industry is a good option considering the growth of Lemon Tree and the fact that Indian Hotels Company Limited is increasing a hotel per month.
The automobile sector looks great considering that the issue with chip shortage has finally decreased and the cost of materials has also decreased with the low demand. The Energy sector’s shares yield high dividends are a good investment. The industry is picking up with the electricity growth and the Government’s practice to take electricity to each & every home is helping as well.
Saurabh’s view was positive on the FMCG sector. Although not recommending any company he stated that Tata Consumer's results were pretty good. Another company Varun Beverages has shown pretty high monthly sales considering their cold drink business.