What is it that you are making of the market structure? I guess, all things in control at least when it comes to the macro data points, when it comes to India. But I guess all eyes now would be on what happens on the tariff front, at least some good news if you were to take any cues from the Vietnam-US deal.
Hemang Jani: Broadly, both global setup and in terms of our domestic market things are looking quite stable and the key factor to watch out would be the earning season. The previews have started flowing in and it remains to be seen if we have any positive surprises in terms of growth, etc.
But having seen a big recovery in the indices both in terms of Nifty and the broader market and the feel good which is coming in because of the global stability, there is a sense that you will see a little bit of momentum when it comes to flows given how the dollar index is performing. And yes, but we badly need good triggers in terms of earnings because last two-three quarters the Nifty earnings is barely about 4-5%.The other stock in news is Nykaa this morning. What are your thoughts there?
Hemang Jani: See, Nykaa has been a stock which has given a lot of promise but hardly seen any major move unlike what we have seen in case of other platform companies. And the numbers are also not looking that great. You keep hearing some people trying to exit out of it and all of that. The only time when it does a little bit of momentum is where you see a little bit of flows because of the indices weight increase, etc. If I was to pick something within the new-age companies, I definitely would go with Swiggy or Eternal or Policybazaar and not Nykaa.
What is your own sense on IndusInd Bank in particular? I mean, lot of news flow but would you think that the worst perhaps is already baked in into the price, is it behind us right now?
Hemang Jani: So, surprisingly IndusInd Bank has seen a very sharp revival in the last probably a month or so once the news was in the air and now it remains to be seen who is identified as the CEO and what kind do we have at helm.
Remember that the basic structure of the bank is good in terms of the distribution, in terms of the deposit franchise that it has. So, having seen a major write off and most of the negatives being out of the way, people would want to relook at some of these stocks. But I do think that banking as a pack could underperform. We have started seeing only signs of that. So, I am not too positive on the banking at least from the near-term perspective.
But if you think banking may be showing signs of fatigue that could happen to the rest of the market as well purely because of the weightage of banks on the index right?
Hemang Jani: So, I think that you will see a bit of a sector rotation. So, now what you are seeing is that some of the commodities are doing pretty well. Pharma has really bounced back in a meaningful way and depending upon whatever the previews throw up, you might see some other sectors really giving you some sort of a stability be it capital goods or cement, so on and so forth. So, market broadly may consolidate. I am not looking at the deep correction in the market given how the setup is, but, of course, there is going to be an interesting sector rotation at play.
