Anand Rathi Brokerage
The Managing Director of Anand Rathi Brokerage, Amit Rathi announced that small caps and midcaps have rise up to 40% as compared to the last year, which is also valued more than the large cap. Mr. Rathi also mentioned that average earnings growth in both the segment touches nearly 20%.
Investors are taking the overview of the last 2 years in the auto and auto ancillary sector, and are being hopeful regarding the interest rate cuts which may consequently encourage the demand for vehicles in times to come.
Ananad Rathi Brokerage MD, Amit Rathi is calling it a step forward towards improving the capital raising, structure of bank holdings and gradual reduction of the government’s stake.
On asking that what is the sense Mr. Rathi is getting with all the interaction that he must have perhaps had so far? Is the mood still extremely bullish towards the Indian Market and is there a lot more potential in midcap and smallcap compared to the large cap space?
Amit Rathi firmly replied to this, “It is start of the conference but from what we have seen in terms of meeting request and the number of meetings there has been a fantastic response. We have almost 110 listed companies almost all of them under a billion dollar market cap. The kind of meetings that we have seen relative to last year is again fantastic so interest continues.
“Stock price are up, on an average midcap smallcap sort of fund which is the reflection of all the sectors done is up about 40-45 percent in the last one year. However interest is still very high. We have close to Rs 3,000 interactions lined up over these two days.”
Mr. Rathi was also asked, that a few companies that were attending his conference were the tyre companies like Ceat, JK Tyre etc. How does he justify the move on these stocks when there is no revenue growth that these companies are seeing because of Chinese dumping?
To this query, MD of Anand Rathi Brokerage replied, “with most of the stocks today, specially the industrial side, auto ancillary, investors are taking a 24 months plus view and saying that these sectors will benefit from lower interest rates because sort of the capex cycle is still a while away.
“I think most investors are betting on is that interest rate can go significantly lower. It seems clear consensus that Reserve Bank of India (RBI) is significantly behind the curve and if interest rates do go down the interest rate sensitive sectors and therefore the entire ancillary space that could see a fall of the demand. So it is not looking at the really the rear view mirror but looking forward in terms of what can happen.”