Decoding Q4 FY25 Earnings: Dolat Capital's Amit Khurana Bullish On These Sectors

Cement was a clear positive surprise, with better pricing and stronger operating leverage than expected, leading Dolat Capital to upgrade the sector from neutral to positive, according to Khurana.

"Staples showed better qualitative positioning, but volume growth remains unclear," he explained. "There were no major disappointments, as earlier setbacks were already factored in."

Overall, he believes the market has held its base well and that upcoming tailwinds should support a stronger earnings trajectory. 

In financials, while PSU banks benefited from credit cost reversals in FY24 - 25, sustaining margins remains a challenge. This is the reason why Khurana sees more opportunities in private lenders.

"We back private sector banks over PSUs. While not expecting major credit deterioration, risks are higher for PSUs. We favour private banks, gold loan NBFCs, and affordable housing finance over traditional lenders, where we remain cautious for now," he said.

Among gold lenders, he expressed preference for Muthoot, citing its strong franchise and established track record. Despite regulatory concerns from the RBI, Khurana remained optimistic about the sector.

"I believe the RBI will remain mindful that any harsh regulatory changes could push borrowers toward unorganised lenders, which the regulator wants to avoid. This is why we expect regulations to be balanced and not too strict," he said.

In the automobile sector, he preferred two-wheelers as EV disruption and underwhelming new launches appeared to be new challenges for passenger vehicles. He also noted that sectors like hotels, despite expensive valuations, have delivered well. However, further upside may be limited. 

"The market isn't allowing a fully bullish stance," he said. "Some stocks like hotels seem expensive with high Ebitda multiples but continue delivering strong results."

Overall, while some pockets look rich, the market has already corrected excess froth, making it hard to label any area as overly expensive now, according to Khurana.