Bernstein has put out a note saying that they have turned cautious on Indian markets, from being constructive earlier. According to them, more stocks are near all-time peak, valuations remain rich and macro risks could surface.
“At this juncture, we are of the view that we should take a pause and reduce our so-called return expectations. We have reached a situation where we are talking about returns, but not as large,” said Venugopal Garre, MD of Bernstein, in an interview with CNBC-TV18.
He said: “Over the past six months, we have reached the state where returns have largely been very broad based. More than 70 percent of the top 200 stocks are 25 percent shy of all-time peaks, and more importantly, if you look at earnings growth recovery and micro recovery, which is built in, it is a fairly smooth sail. So, at the margin, there are potentially some downside risks rather than upside risks to that.”
On Reliance, Garre said, “We have been very positive on Reliance, not just from a rating perspective, but we introduced Reliance in the India portfolio at around Rs 1,300 levels last year. We are excited about the opportunities in the B2C side or the e-commerce side, which is an area where we believe they have the funding as well as execution abilities, to cater value both on the B2B link of e-commerce as well as on B2C side which is immense.”
“I would be neutral on the new energy side for now, until I really get excited about it and I would have wanted a lot more money to be spent on the e-commerce side,” he said.
For full interview, watch the accompanying video.
(Edited by : Dipika)