Earnings to be better in cement and steel sectors in medium term: Pankaj Pandey

Pankaj Pandey, Head Research, ICICIdirect.com, says net successful the cement and alloy sectors are poised for improvement, making them charismatic concern options. Cement companies person already shown promising Nifty growth, portion the metallic assemblage holds imaginable for a affirmative surprise. Price increases of Rs 5,000 to 6,000 crossed the committee are expected to importantly payment metallic companies successful the archetypal quarter.

What is your presumption connected the wide earning season? Not galore companies person outperformed the estimates. We went into this 4th with precise subdued expectations. Do you deliberation going ahead, erstwhile the representation gets a spot clearer, net volition beryllium the cardinal catalyst to thrust the markets going ahead?
Pankaj Pandey: You are close that successful Q4, the wide anticipation was beauteous subdued. From that perspective, net are not a large miss. Yes, things could person been better. But our consciousness is that FY26 looks a batch better. If you look astatine FY25, we had mostly a azygous digit marketplace appreciation and a akin earning growth. But FY26 looks a batch better, particularly from the commodity pack. You are seeing quarter-on-quarter betterment and FY26 looks a batch amended and wide consciousness is that net are expected to beryllium successful debased treble digits, astir 11-12 unusual percent.

From that perspective, a akin marketplace instrumentality is expected and from that perspective, the net person not been a large disappointment. I would similar to item that this becomes much of a banal circumstantial scenario. For example, successful auto, M&M is delivering precocious teen measurement maturation whereas a batch of different players are witnessing degrowth. So, it has go a precise banal circumstantial market.

What has been your speechmaking into this? Do you judge this quality travel could sentimentally interaction the Indian pharma player, particularly those who person a ample vulnerability to the US marketplace oregon bash you judge that overmuch is already successful the terms fixed the information that we person been lingering and that overhang has been determination for rather immoderate clip now?
Pankaj Pandey: Largely, this bid pertains to the innovator cause arsenic the destinations mentioned are sources of innovator drugs. So, from that perspective, we bash not truly spot excessively overmuch of an interaction connected the markets for america due to the fact that we are mostly a generic supplier and connected apical of it, we are doing reasonably good successful presumption of negotiation. From that perspective, I bash not spot much of a knee-jerk reaction. This could person acold much implications for Europe oregon different places from wherever the US sources bulk of their imports.

The FDA volition enforce amended API root reporting. Do you judge immoderate of the API players volition beryllium the cardinal to ticker retired for fixed the information that the players that you are talking astir excessively are heavy babelike connected China for importing these earthy materials.
Pankaj Pandey: I bash not regularisation retired a script wherever you spot higher scrutiny from FDA and that has gone up successful the past fewer years. So, that is precise overmuch possible. Relatively our consciousness is that erstwhile you speech of different competitors similar China, our consciousness is that we are comparatively amended placed, but yes determination is inactive immoderate uncertainty astir this news.

It is simply a benignant of a hold and ticker concern and connected apical of it, we are seeing immoderate of the companies looking astatine having immoderate benignant of a outer manufacturing capableness successful the US. That mightiness besides mitigate the wide impact.

Yesterday, the OMCs had gains of betwixt 4% and 7%. Following the cool-off successful crude lipid prices, would OMCs beryllium the champion play oregon is it clip to look astatine immoderate of the different sectors also?
Pankaj Pandey: The bully portion astir crude terms is that present large players similar Saudi Arabia are looking astatine expanding their marketplace share. So, gone are the days erstwhile they utilized to ramp down accumulation to support crude lipid prices. This is structurally precise affirmative for america due to the fact that we import astir Rs 10-12 lakh crore crude oil. Any benignant of a terms diminution is simply a payment whether it stays with the user oregon stays with the government.

Obviously, OMCs volition payment from this facet and the different facet is that successful lawsuit of a rewiring of the LPG proviso chain, this is affirmative for each the OMCs which is wherever we consciousness that things could beryllium better. For a batch of different idiosyncratic industries similar FMCG, the payment volition commencement accruing from Q2 onwards and likewise successful a batch of different sectors similar cement, wherever our consciousness is that adjacent the petcoke prices could soften.

A batch of beneficiaries volition look implicit a play of time, but crude lipid prices are declining and countries are not truly competing and not restricting prices is simply a large affirmative for us. It besides helps america successful lawsuit a fiscal broadside warfare escalates and thing happens, we are fiscally acold amended positioned to undertake immoderate benignant of a fiscal interaction arsenic well.

Which is that 1 assemblage which successful the medium-term oregon so, volition beryllium a marketplace outperformer to ticker retired for and laic bets on? It should not beryllium banking.
Pankaj Pandey: I similar the commodity battalion – some cement and steel. These are the 2 sectors wherever the net are going to beryllium amended and Nifty maturation and numbers person travel retired particularly connected the cement institution side, we are liking that and metallic could beryllium different astonishment constituent due to the fact that we person not seen that overmuch of a terms performance. But that is different assemblage wherever we consciousness that overmuch of the payment has not truly flowed successful Q4, but Q1 is erstwhile we are going to spot the payment of astir Rs 5000 to 6,000 summation successful the prices crossed players. So, these are the 2 pockets that look comparatively bully to us.