Dharmesh Kant from Cholamandalam Securities in an interview to ET Now noted that infra companies have delivered only “10–12% kind of a growth” over the last two years, much below expectations. He added that order inflows typically rise during December and the JFM quarter, and the current uptick aligns with that seasonal pattern. According to him, “L&T is one play which we have been liking,” supported by a strong order book and hopes of steady margins. He also highlighted NCC as another preferred pick.
However, Kant pointed out a critical challenge: “The only problem… is the Jal Jeevan Mission money not coming.” With audits delaying payouts, several infra players have been struggling with working-capital strain. He expects this to ease gradually once the government clears pending dues.
EMS Sector Hit by Growth Normalisation
The recent developments around Kaynes have cast a shadow over the broader EMS pack, and Kant believes the reaction is partly justified. He explained that EMS companies were growing nearly 100% annually a few years ago, which led investors to assign lofty valuations. Now, growth is settling to “around 25% or 20% kind of a growth run rate,” creating a mismatch between expectations and reality.
He stressed that while EMS firms will continue generating profits, “the valuation multiples—there is a great disconnect.” Many of these businesses, he argued, operate in low-value-add segments such as PCB processing, making it hard to justify premium valuations. According to him, even after deep corrections, the segment may remain subdued: “For next one-and-a-half, two years this space is done with.”
Kant illustrated the pattern with an example: “Please do remember Trent… at 5,000 everybody was saying no, still delivering 25% kind of a growth, but from there it has come down to 4,000.” He believes similar profit-taking has occurred across EMS counters.
PSBs Still Offer Value Despite Market Volatility
Even as market volatility has shifted investor focus elsewhere, Kant maintains a constructive view on public sector banks. He said the sector is in the “beginning of a larger long-term trend,” and despite a strong rally, several PSBs remain undervalued. He highlighted Bank of India in particular, noting it still trades at “0.6 time price to book one year forward” while consistently delivering 13–14% credit growth over five quarters, with stable asset quality and ratios. Kant added that PSBs are becoming more aggressive in retail lending: “They are gearing up for vehicle loan, personal loan, and the gold loan foray.”
His top preferences remain Bank of India, followed by Bank of Baroda and Canara Bank. Over time, he expects these lenders to be “rated at par with private sector banks.”
