ETMarkets PMS Talk: Manoj Bahety explains how he wants to capture “trillion dollar India opportunity” thro

The Indian manufacturing sector is expected to witness significant growth in the upcoming years due to the government's focus on the sector, according to Arvind Kothari, the Founder of Niveshaay. Kothari expects renewable energy, recycling, and electronics manufacturing to emerge as promising potential wealth creators for the decade. In contrast, companies with poor cash flow and low visibility in earning growth could underperform in FY24, despite a strong earnings recovery season in Q4 anticipated.

Steady demand, lower input costs and stable interest rates supported the performance of corporate India in the September quarter. The energy and automobiles sectors contributed the most to India Inc.’s profitability. As many as 490 companies of the Nifty 500 index reported an aggregate revenue and net profit (adjusted for extraordinary items) growth of 1% and 43%, respectively, on a y-o-y basis. Excluding the financial sector stocks, the aggregate EBITDA of 405 stocks grew 40.7% y-o-y.

Diversify a portfolio with strong growth prospects, good management quality, and governance, buy a company at a significant discount to its intrinsic value, and hold and track it patiently and constantly.

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The message is clear: To lift growth and create jobs, a manufacturing push is vital. At The Economic Times Awards for Corporate Excellence, Finance Minister Nirmala Sitharaman was confident that the Indian private sector is ready to step up to the challenge. And senior business leaders seemed to agree.

Indian earnings are back on track with 15% median earnings growth for the Nifty companies having been announced. Coming to whether ONDC will badly impact Zomato, Shenoy says Blinkit is a bigger problem for Zomato compared to what ONDC will do on the food side of the business. The 10 minute delivery is not a greatly successful model for India right now.

Elections do bring volatility. If one were to look at data for the last 30 years, despite the short-term volatility around pre and post election results, markets have given positive returns in almost all the terms of different political parties across this period. Given that we have had a good run up in the recent past, our guess is that we may see higher volatility as the election season comes closer.

1Q24 was the first normal quarter after 1Q20, devoid of any covid wave during the quarter or base quarter. The demand scenario is mixed, with some green shoots in 2-wheelers and FMCG in rural India.

“If you look at the kind of companies where the stocks are going up even more are the ones that are not even covered by many research houses. So the stocks that are the smaller ones, not in any coverage by the sell side are still seeing a lot of rally. So clearly, there is some irrationality.”

The earnings of 26 Nifty companies that declared March quarter results have increased by 10% YoY, driven by financials, according to Motilal Oswal Securities. Earnings momentum continued in the banking pack, with most lenders reporting growing margins, while consumer earnings growth remained flat YoY. Companies in both consumer and IT have reported weak earnings and a bleak outlook for growth this year due to muted consumption growth and expected global macroeconomic slowdown. Kotak Institutional Equities predicts moderate earnings growth over FY24-25 with few upgrades across sectors and has added Adani Ports and SEZ to its largecap portfolio.