Pankaj Bobade about Coronavirus effect on the domestic stock market:
Pankaj Bobade, Head of Fundamental Research, Axis Securities Ltd shares his expert view on the Coronavirus effect on the Domestic stock market. “The Budget 2020 and the Reserve Bank of India monitory policy have some good measures to put the economy on the right track. However, we expect the Indian economy growth will boost the capital market for both mid and long term”, said Pankaj Bobade.
Q: What is your opinion on Q3 results? Will the Q3 earning largely done with it?
So far, the results for Q3 for the financial year 2020 was better than the same quarter last year. The earning of all the companies is coming to an end, through a part of it is coming through the Corporate tax cuts. As the economy growth expands at a faster pace, it would lift the consumption-led demand. First, rural development needs to improve with good Rabi crops and however, some measures need to taken by the government to increase the income level for farming and farmers’ wealth.
In Budget 2020, the government allotted 1.3 lakh crore towards Rural development. These measures will put the economy at a higher pace. We are confident that our economy will reach par than over expectations.
Some short term industries facing impacts against dangerous Coronavirus and some companies look for alternative sources of manufacturing However, this will provide an opportunity for Indian manufacturers to fill the space left by China.
Q: Pankaj Bobade Can you please tell me? What are the sectors that will benefit due to the Coronavirus?
Some industries that will benefit from Coronavirus are ceramics, homeware, fashion, lifestyle goods, and textiles. However, some company already facing high demand and pricing from European and US unions.
Q: What will be the strategy of investors after Budget 2020 sector-wise? Can you mention it?
The industries that benefit from Budget 2020 and RBI’s Monitory Policy are Infrastructure, Agriculture and Rural Economy, Real estate, Micro Small & Medium Enterprises (MSME), and Housing finance companies. These sectors will get more benefit from Budget 2020 and Rbi policy.
Q: Will the market remains consistent in Q4? Does that mean it would help for both mid and small-caps than large caps?
It is very difficult to catch the pulse of the market because it will change with a second. But in my opinion mid-cap and small-cap continues there growth in the coming months. The companies that perform remarkably well in the market and reported some good profits with cheaper valuations. The large caps are expensive the valuation gap between the large caps and mid-caps would be bridged over time.
Q: What’re your expectations on rate cut transmission this year, after Reserve bank of India asks the PSU to cut lending rates?
The RBI’s decision to help banks to reduce the cost of funds for the long term as they can barrow at repo rate which is lower than the cost of funds for them. This decision gives assurance to banks when they see the deposit rates are down. The banks are already invested Rs 1,000,00 crore in the market. So, the decision of RBI enables banks to reduce lending rates and lead to a greater transition.