If bulls rule, the next rally will be led by lower quality stocks: Saurabh Mukherjea

Sensex & P S & P, which trades at a price / 21.99x equity ratio and a reserve price of 2.92, reached a new high of 30 712.35 last week. The ratings have exceeded comfort levels and even foreign investors put their bets on speculative stocks, said Saurabh Mukherjea, Ambit Capital in an interview with CNBC-TV18.
“In the FII space, I now see that foreign investors are looking for speculative purchases. Given the current valuations, high-quality companies, so they are being traded, are trading at a P / E of 40-50x which prevents FII inflexion into purchases Speculative, “he said.
Mukherjee added that if the bull market continues, the next stage of the rally will be run by lower companies, poor management teams and a weak situation.
S & P BSE Sensex has gained more than 14 percent in 2017 and many companies in the mid- and small-cap have already more than doubled investor wealth over the same period, which pushed many stocks of relative valuations In the long run.
As for the banking sector, Mukherjee said some of the better-organized FP banks are trying to raise capital. The Reserve Bank of India (RBI) will try to push some of the stress cases and advisory banks to a haircut.
A haircut is a difference between the actual amount of the particular loan and the value of the assets used as collateral.
“The scale of the AFN problem reaches the stage where it is not obvious that government, private sector or sovereign wealth funds can effectively display Indian banks. We look at the required 30 billion in the current budget and the next one for Do it, “Mukherjee said.
Commenting on the property, he said the story of affordable housing is the most hypnée story. Unfortunately, there are not many listed real estate developers who are focused on the affordable housing plan.
According to the definition of affordable housing, the RBI sets the cost of a house does not exceed Rs 65 lakh and Rs 50 lakh in meters and non-meters, respectively.
That said, the RERA will force the consolidation of the sector. The small developers will eventually collapse into the arms of leading manufacturers. Conversations with developers do not suggest a recovery in demand or GST improving the terms of trade.
“Yes, there is a meeting space. Affordable housing as a topic has a huge amount of time, but not much has changed on the floor,” Mukherjea said.

Leave a Reply

Your email address will not be published. Required fields are marked *