The markets are expected to consolidate for the next six months, according to Krishna Kumar Karwa, managing director at Emkay Global Financial Services Ltd.
“Investors won't be in a hurry to buy stocks as they would see the stability first rather than an uptick,” Karwa told BloombergQuint in an interaction. “Big-time risk appetite will only come after general elections and not after state elections.”
Here are the key highlights from the conversation:
On Overall Markets
- The management commentary will be a key watch rather than earnings.
- Witnesses a major uptick in the valuation of large caps.
- Investors will be very careful in the next six months before infusing money aggressively.
On NBFCs
- NBFCs have a robust business model and they fulfill the need not met by various banks.
- There is no wishing away the importance of NBFCs in the whole credit ecosystem.
- NBFCs tend to be more cautious in the next few months in terms of retaining their liquidity and possibly slowing down disbursements, etc.
- Expects a slowdown in NBFCs in the next few quarters.
On Automobile
- Raw material prices are expected to impact the companies' margins.
- Suggests to invest in auto stocks as valuations are becoming reasonable.
- Many auto stocks have been quoting premium to their historical valuations.
- Expects investors to make decent returns with a long-term view.
- Believes that the passenger vehicle segment is an under-penetrated market.
- Commercial vehicle segment looks positive for short-term traders.
On Mutual Fund Outflows
- Mutual fund outflows are usual in September.
- Most investors were scared due to the crisis at IL&FS.
- Monthly flows in equity mutual funds have been reducing.
- Domestic inflows in equity funds need to be robust.
Watch the full conversation:
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