Balasubramaniam also suggested emerging sectors that investors should look out for.
“Investors should definitely look at exporters from India, which will benefit from duties on China. So there is a whole list of companies that you can evaluate. I think it is time to once again start looking at, for example, the chemical sector, which has been out of favour for the last two to three years,” he said.
The JM Financial executive highlighted that the chemical sector had seen FII inflows coming in during October as valuations came off. The sector also saw muted earnings, resulting in a low likelihood of missing estimates.
“If those (by the US) duties on China actually come through, it will relatively favour India. The supply chains in chemicals were, anyway, already moving from China to India. People should evaluate chemicals very constructively in our view,” he said.
According to Balasubramaniam, investors should also watch out for wires and cable companies and other key emerging sectors.
“They (wires and cable companies) have had disappointing numbers in the second quarter. Numbers have been cut. Valuations have become reasonable. I think people should look at that particular sector once again very closely,” he noted.
He also predicted that things would start looking up in the macro space with factors like the government spending more capex than that of the first half.
“We believe that capex could rebound in the second half, and that will percolate throughout the economy. Maybe not a strong rebound, but the glass will start filling up in the Q3 gradually, and we should see it filling up even more in the Q4,” he explained.
