“Stocks will correct if sales slow, irrespective of profit growth. Debt levels don’t impact sales velocity, which depends on consumer sentiment. We prefer pan-India players, as they are better insulated if some pockets soften,” he said.
On corporate earnings for the second quarter, Chowhan highlighted a few sectors. Banking performed well, while the chemical sector was a surprise, with some companies posting strong margins and growth. Auto results were in line with expectations, with no major surprises. “Overall, earnings surprises came mainly from chemicals and a few unique companies,” he noted.
Regarding the two-wheeler industry and recent GST cuts, Chowhan pointed out that growth rates are better than a year or two ago. However, his portfolio avoids direct auto exposure due to valuation concerns and Indian companies’ preparedness for the EV transition. “We prefer auto ancillaries, which allow us to play the growth theme safely. Auto numbers are likely to stay positive over the next four to five quarters,” he added.
Investors and analysts are closely monitoring real estate, chemicals, and auto sectors, balancing growth potential against valuations and market sentiment.
