The earning season is at the fag end give us your sense that which are the pockets that are looking attractive to you at this point in time and what do you make of the markets.Dipan Mehta: I think that broadly this earning season has been a bit of a disappointment and across the board large sectors like banks, NBFCs, software, they have disappointed and also across the board it seems that there are a lot of issues in terms of earnings growth which, of course, may get resolved going forward with better monsoons, lower interest rates, and tax cuts.
But this earning season has been a mixed bag and what this earning season also is telling us is that the market is going to get extremely selective and the broad-based rally which we saw for the last three-four years that may not continue into the future.
Coming specific to your question as to which are the sectors where numbers were good, I thought we had the first good signs of pick up in consumption, especially urban consumption, so be it QSR or be it retail, be it hospitality, or even healthcare, all of those sectors, travel and tourism, aviation, all of those did well, so that is one clear conclusion from this sector that consumption stock started to do much better.
Other than that broadly it has been a bit of a mixed bag, but within sectors also which have disappointed, there could be a few winners like in cement I thought ACC, Ambuja, Birla Corp, came in with good set of numbers.
So, like that, if you go sector by sector, there are some winners but by and large we come out of this earning season with lower ideas or lesser ideas than when we enter it. Want to get your sense on the pharma sector in specific because the kind of move we have seen from pharma, it has been underperforming the market, but today it is doing very well for itself, names like Gland on the back of good set of numbers are keeping this pharma space in focus today, how would you play the pharma space, what would be your outlook going ahead, and which pockets or themes within the pharma pack you are liking at the moment?Dipan Mehta: Again, pharma is a classic example of what I said that one needs to be very selective in the market and within the pharma also companies which have a slightly differentiated business model, they may emerge to be winners. Within the pharma space, we like the CDMO companies where we think there are good growth prospects and overall, I think because of China plus one they will benefit significantly, but there is still a lot of uncertainty around Trump tariffs for pharma companies so that also needs to be kept in mind.
So, I would say it is important to be a bit selective and focus on companies which have a different business model and on the whole investors should be equal to slightly underweight pharma as well. Last few quarters have been exceptionally good, so base effect will also come into play from next quarter onwards, so you could see slowdown in earnings on that count as well.
