Indian valuations are expensive but one needs to factor in low interest rates as well, said BNP Paribas’ Manishi Raychaudhuri on Monday. Speaking with CNBC-TV18, Raychaudhuri also said that earnings upgrades in India are encouraging.
“Valuations are expensive, particularly in the context of India, but at the same time, in an environment of increasing earnings estimate and low cost of capital, what appears expensive today might appear relatively cheap a few months down the line,” he said in an interview to CNBC-TV18.
Raychaudhuri said that the BNP Paribas is incrementally moving into the value stocks.
“We have increased position in materials, in some pockets of industrials, also consumer discretionary, the classic value picks,” he said.
Raychaudhuri also said that they continue to remain invested in tech stocks and believe the companies will continue to do well.
“We are not taking our foot off the pedal as far as the tech mega trends are concerned. We believe that some of the mega trends shall last over 2021 and beyond,” he said.
In commodities, he likes the metals pack but advised caution while picking stocks.
“We personally do like the ferrous and even the non-ferrous metals. We think that one should be selective in this sector or in general in the materials sector purely because the different companies have different balancesheet strengths,” he said.
On banking sector, Raychaudhuri believes that the worst of corporate NPAs could be behind for private banks. He said that he continues to remain positive on private sector banks and insurance companies.
Raychaudhuri said that he would play real estate theme via housing finance companies.
“We have incrementally added to the housing finance companies also over the past 2 months. We are seeing a small upturn in the real estate side, but we would rather play that through housing finance companies right now,” he said.
On the auto sector, he said that he is not bullish on the two wheeler space, but he likes the market leaders in the four wheeler space.
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