Green Portfolio PMS founder Divam Sharma, however, keeps a distance from the gas space. He says gas stocks are highly dependent on government policies as well as the price of crude and is a very volatile space to be in
Green Portfolio PMS founder Divam Sharma has a mixed view on the March quarter earnings — autos and banking have done well but pharma is still ailing on the margin front.
Cooling inflation and commodity prices, however, augur well not just for the pharma but also for chemicals and textiles, says Sharma, who has more than 15 years of experience in managing investments.
In an interview to Moneycontrol, he says chemical companies will be in a pole position as inflation slows, margins improve and exports recover. Valuations are extremely comfortable in this sector, he says. Edited excerpts of the interview:
Are the largecaps reasonably valued now?
The broader market is heavily discounted and unreasonably valued. If you look at the BSE 250 smallcap index, the index is trading at a price-to-earnings of 18.5x, which is only slightly above 2020 lows. Small and mid-caps is the space we are bullish about and (have) expertise in.
However, the Nifty50 and the largecaps have seen a good run and believe they are reasonably valued now. If international consumer and industry demand continues to remain weak, it will affect our exports negatively. This slump in exports, if I take it as a case, will be counterbalanced by the buoyant consumption market. Strong domestic sentiments can be observed from the GST, power consumption and travel data.