Who got high with the first quarter results, who is helpless, where to bet now

The season for quarterly results is now over. The companies have presented the books of account for the first quarter. In the midst of the Covid crisis, some companies performed well, while for some it was a difficult time. Therefore, before investing in these companies, you have to see their books of account so that financially sound company can be selected. In order to shine a portfolio, it is important that the profit margins are clearly understood. In this special conversation with the experts, each sector is being scanned closely so that you can know which company you have to deal with.

Joining CNBC-Awaaz in this discussion are Gaurang Shah of Geojit Financial and Parthiv Shah of Tracom Stock Brokers.

Let us first look at the results of Q1FY22. The first quarter results were as expected. Companies have got support from weak base and partial lockdown. A sharp rise in commodity prices has had an impact on margins. According to the management, there will be an improvement in demand after June.

In Q1FY22, sales of NIFTY-50 companies have grown by 50% y-o-y and EBITDA by 41% y-o-y.

There have been downgrades in the auto, NBFCs sector and upgrades in metals and cement during this period. If we look at the triggers ahead, the reduction in lockdown restrictions, reduction in active corona cases, accelerating the pace of vaccination and the expectation of a normal monsoon are acting as triggers for the market.

If you look at different sectors, most of the private banks have shown new slippages in banks/financials. However, the impact on asset quality has been less compared to the first wave.

Looking at the technology, we are seeing strong growth (QoQ) for 4 consecutive quarters. The results of most of the companies have been better than expected. Looking at AUTO, the results of this sector have been weaker than the market estimates. The problem of auto companies has increased due to the lack of chips.

Looking at FMCG, most companies have seen double digit sales growth. Weak base, improving rural and urban demand have benefited. The problem has been compounded by rising raw material costs. Talking about METALS, the best results have been seen so far in the metal sector. It has got good price in domestic and export market.

Talking about PHARMA, the results of this sector in the first quarter have been as per the expectations of the market. The results have got support from the low base. Strong demand for domestic formulations and Covid medicine has been supported. Decline in US sales, slowdown in new launches worries.

what to buy, where to get

Geojit Financial’s Gaurang Shah picks

In banking, buy HDFC Bank with a target of Rs 1950. At the same time, exit from Bank of India. Buy in Cement sector ACC with a target of Rs 2600. At the same time, Ambuja left. Buy in Metal Tata Steel with a target of Rs 1850. At the same time, sell in JSPL. Buy autos at M&M with a target of Rs.980. At the same time, stay away from Maruti.

Parthiv Shah’s Investment Advice

Parthiv Shah has buy advice on INFOSYS target Rs 2070, MARICO target Rs 625 and JB CHEMICAL target Rs 2040. At the same time, they are advised to stay away from HAPPIEST MINDS, DABUR and GLENMARK LIFE SCI.

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