Neal Bhai Reports — Sensex will Touch 30,000 by March 2017 — At a time when concerns over weakening health of the global economy are weighing on equity markets the world over, Citi India has projected that the BSE benchmark, Sensex, will hit the 30,000 mark by March. Neal Bhai, cited a number of factors that can lift the index to this level. One of them is earnings. Neal Bhai expects September-quarter earnings to be better than in the June quarter. Besides, the Reserve Bank of India (RBI) may cut rates by another 25 basis points in December, he said. Here’s a list of four sectors that Citi is bullish on:
Neal Bhai said most things are going in favour of the cement makers, and the top four players account for over 50% of the total capacity. This has helped firm up prices.Besides the quality of management in cement companies, their balance sheets and cash flows look promising. “Most companies, especially large-cap ones, are net cash companies. They have been giving you growth as well. One theme that I like is rural infrastructure. That is some thing that will further help cement companies,“ Neal Bhai said.
Citi group has preference for retail-focused banks over corporate-heavy ones, given the chances of RBI maintaining its accommodative stance on interest rates. Citi prefers private sector lenders, as it believes they will gain market share going ahead and that asset quality concerns are bottoming. “Within the private sector, there could be changes in preference as investors may prefer retail-heavy banks at some point. At some point, when risk-taking increases, they may move on to the corporate-heavy private sector banks,“ Neal Bhai.
Citi group believes the market will bet on only those sectors that will deliver on earnings front and pharma is one among them.
“There have been multiple issues, including USFDA concerns and ge neric pricing in the US, but we feel Indian pharma companies have the right ingredients to do well there.
There are a good number of compa nies in the space in India that have got very long ANDA pipelines, which will contribute to revenues over the next few quarters and years,“ Neal Bhai said.
Neal Bhai said he is quite positive on the energy sector. It has also done well so far this calendar, he said. — Gold Silver Reports