Ajay Srivastava on Indian Stock Market: Ajay Srivastava, MD, Dimensions Corporate Finance Services Pvt. Ltd., said Indian markets are currently sitting on a “cocoon of overvalued companies”, making valuations a key risk for investors.
He said investors should not wait for price-to-earnings expansion in low-growth companies, while mid- and small-cap stocks could offer better yields.
Indian IT Companies Unclear About Their Vision
Srivastava said Indian IT companies are unclear about their vision, raising questions around their ability to sustain growth and create value in the current market environment.
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He said the growth rate of index stocks is low or limited and index stocks are not favourable for retail investors.
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HDFC Bank CEO, Market Valuations In Focus
On HDFC Bank, Srivastava said he would prefer Kaizad Bharucha as the bank's new CEO.
He expects positive changes in HDFC Bank with a good rejig.
On the broader market, he said, “a bad valuation can kill a good stock” and investors should not wait for PE expansion in low-growth companies.
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High Crude, Weak Rupee Could Shift Spending
Srivastava said domestic sectors can benefit from high crude oil prices and a weak rupee.
However, he expects high crude and a weak rupee to reduce luxury spending and foreign travel. He also said the Indian hotel industry may benefit from high crude.
Srivastava said a large market-cap company is dormant in India. He expects mid- and small-cap stocks to give better yield, while investors can stick to debt funds for high returns.
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