Hiren Ved, Director CEO and CIO at Alchemy Capital Management on Thursday said that the last two quarters have seen earnings upgrades and he won't be surprised if they see an earnings upgrade after this earning cycle as well.
“We should have a reasonably strong earnings season,” he said.
In terms of the IT sector, he stated, “We are structurally very bullish on IT services. The sector will do extremely well over the medium-term to long-term.”
The tractor segment has been doing well for the last year. He believes pick-up in infrastructure spending will boost demand for tractors.
“We had very good monsoon for the last two years and the tractor industry has done phenomenally well. It should do reasonably well. As capex picks up, as infrastructure spending picks up, road building picks up, you will see significant benefits for tractors as well,” he explained.
According to him, the future of banking is digital. Incrementally the environment is getting far better.
“Cyclical companies or metal companies or engineering companies are focusing on capital allocation, increasingly they are reducing leverage, focusing on working capital as well. So, I think if we can get confidence and we will have to pick and choose on how to play this, more often than not the most efficient way of playing the infrastructure spending has been through cement companies. Now we should definitely look at metals, cement, commercial vehicles (CVs),” he said.
“The pecking order is likely to be how efficiently these companies are able to generate cashflows, deleverage their balance sheet and focus on disciplined capital allocation,” he added.
"Anything that is digital and cyclical is likely to do well," he said.
For full interview, watch the video...