Key Points
Mayuresh Joshi, Head, Equity Research-India, William O'Neil, says as metal demand comes back slowly and steadily as far as China is concerned, the expectations of a soft landing in the US, strong recovery signs that we are seeing in Europe and holding out of macros and the expectations of infra spend in India, is expected to keep volumes afloat as far as Indian companies are concerned..
The second element is around the same periodicity of time, a large expectations are getting laid out that China should see the initial signs of recovery and as those recovery signs become a little bit more eminent, the expectations in terms of restocking which will start happening across the metal pack whether it is ferrous, whether it is non-ferrous will start boosting LME prices...
The reported EBITDA per tonne in excess of 20 odd thousand for the first half should show signs of improvement as we do the next few quarters and as a serious economic recovery takes place across the globe and therefore, volumes, value added products, the expectations in terms of better margins coming and a better reported EBITDA per tonne should probably raise EPS estimates even for the next financial year..
So, I think the huge move that you have probably seen in a large part of the midcap IT spectrum gets a boost as you rightfully put forward in terms of the comments from the Fed, the expectations of a soft landing, which probably means discretionary spending at the client end, specifically in these pockets of a million to 10 million where a lot of these midcap IT companies work out with that should have steady inflows and a lot of commentaries are pointing to that...
A lot of companies have deleveraged their balance sheets to a large extent and therefore, the kind of earnings momentum that one can expect from these stocks can very well continue. Obviously, historical valuations and where they are trading at the juncture are fairly valued as we speak, but if earnings are expected to come strongly in the next few quarters, the momentum can very well continue, assuming we are in the mid of that cycle...
You might be interested in
IT midcaps and smallcaps, consumer discretionary stocks showing better traction: Sumit Poddar
26, Apr, 23Tikona Capital's Sumit Poddar believes that the fall in inflation, crude prices and commodity costs are driving a positive shift in consumer discretionary stocks, and predicts that this trend will continue. As customers regain their spending power, there will be growth across the consumer discretionary sector, especially in areas like footwear and railway capex. Poddar recognises that IT spending is down, but notes that small or midcap IT services companies are likely to show better traction.
Midcap and smallcap stocks will continue to outperform, says Vinit Bolinjkar. Here’s why
27, Sep, 23Vinit Bolinjkar, Head of Research at Ventura Securities, expects earnings to continue strong in India, especially with an influx of bond money that will lower the cost of funds. He remains positive on midcap and smallcap stocks, as earnings have been solid and there are opportunities for growth and lower acquisition costs for MSMEs. Bolinjkar also believes that consolidation in the cement industry will benefit smaller players.
What could be the market triggers for June, July and August? Anshul Saigal answers
25, May, 23Indian markets are likely to continue their rally thanks to benign liquidity, stronger-than-expected results so far in the current quarter, and diminishing pressures on pricing. Underperforming sectors such as pharmaceuticals as well as capital goods, consumer durables and defence companies offer good opportunities. Stocks of safe bets, like ITC, Britannia and HUL, are doing well due to favourable valuations and strengthening ownership in a scenario of intense uncertainty before the election.
Mayuresh Joshi on 3 Adani Group stocks that can be bought on dips now
27, Feb, 24Mayuresh Joshi, Head of Research -India, William O'Neil, says earnings are expected to hold up the market because that is ultimately the crux on which the markets hinge upon. The market looks in fine fettle as we speak and both the macros and micros as far as India is concerned are holding out pretty well for the markets.
D-Street darlings outdo Nifty heroes on Q3 earnings scoreboard; can the show continue?
20, Feb, 24This continued upbeat show of the companies in the broader market has played a significant role in driving stocks higher and turning many of them into multibaggers.
Smallcap stock screener: FIIs, mutual funds consistently buying these 9 counters
30, Jan, 24The trend of smallcaps and midcaps outperforming largecaps continues into the new year. A screener reveals 9 smallcap stocks with consistent buying from mutual funds and FIIs in the last four quarters of 2023. Notably, Electronics Mart India, Ion Exchange (India), Bharat Bijlee, Prism Johnson, Procter & Gamble Health, Five-Star Business Finance, Carborundum Universal, BASF India, and Hindware Home Innovation have all seen increased institutional investor interest. These stocks have shown significant growth over the past year and are expected to benefit from various factors, including strong demand and industry tailwinds.