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FY19 will see 15%-plus growth in earnings: Rajat Rajgarhia

Bullish on three spaces -- financials, auto and selective consumption plays, says Rajgarhia

, ET Bureau|
Mar 13, 2018, 08.31 AM IST
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ET Bureau
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"The December quarter, was one of the first quarters where the earnings did not get cut and many spaces or companies started seeing some recovery ."
T he next 12 months will be an important factor for flows, especially from offshore, because investors will look forward to a strong electoral mandate and continuity of the policies, said Rajat Rajgarhia, CEO, Motilal Oswal Institutional Equities. In an interview with Sanam Mirchandani ahead of the firm’s Eureka conference in London, Rajgarhia said he is bullish on themes such as value migration in the financials space.

Edited excerpts:


How are you advising clients to play this market?

Whatever happens globally will have its implications on us, both positive and negative. When people get too worried about the trends which are happening globally, India shines because then people start focusing back on the markets which are relatively less impacted from these big global trends. But for that we need to ensure we have our growth engines back.

What are the key triggers for the Indian market going forward?

The next 12 months will be a period of a very busy election calendar. This will be an important factor for flows, especially offshore flows, because investors will look forward to a strong mandate and continuity of the policies.

What is your earnings outlook after the December quarter results?

The December quarter, after a long period, was one of the first quarters where the earnings did not get cut and many spaces or companies started seeing some recovery from the earlier trends. FY19 will definitely be a period of double-digit earnings growth, in the range of 15-20%. Ex-PSU banks we should look at 15%-plus growth.

What are your thoughts on the PSU banking space?

The value migration in the Indian financials space will keep happening for a long period of time and events like what happened in the past couple of months just reaffirm that or they will hurry up the pace of this entire value migration. Till the time we do not see very meaningful reforms in the entire way in which the PSUs (banks) are run, there is enough of growth left for some of the other players.

What are the investment themes that you are bullish on?

There are 2-3 very interesting themes. Firstly, the whole value migration in the financials. You will see 8-10 efficient private banks and NBFCs growing well. Secondly, if you look at autos, the recent monthly numbers were quite good. The whole rural space is looking interesting. Thirdly, selective consumption plays which benefit because of this entire rural play should also do well.

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