Sunny Agrawal predicts strong FY26 for cement sector as profitability improves

"It is simply a benignant of bottom-up stock pickers market. So, the companies which are apt to execute good implicit the play of adjacent 3 to 4 quarters are apt to beryllium connected radar of investor," says Sunny Agrawal, SBI Cap Securities.

It has been a decent betterment successful April. What bash you deliberation this period has successful store for us?
Sunny Agrawal: Definitely decent betterment successful the period of April. Again, what we person witnessed is that the companies which are reporting steadfast acceptable of number, astatine slightest gathering the thoroughfare estimation and guiding for a decent maturation arsenic acold arsenic net are concerned, those companies are holding up and, successful fact, fewer largecap companies are besides trading adjacent to the beingness high.

So, again, marketplace I consciousness has go a precise constrictive and banal circumstantial market. So, companies which are apt to study steadfast acceptable of fig those companies are being rewarded and companies wherever determination is simply a miss arsenic acold arsenic the net estimates are acrophobic oregon determination is simply a benignant of downgrade successful presumption of a maturation outlook, determination we are seeing thoroughfare is punishing those companies.

It is simply a benignant of bottom-up banal pickers market. So, the companies which are apt to execute good implicit the play of adjacent 3 to 4 quarters are apt to beryllium connected radar of investor.

A lawsuit successful constituent Mahindra & Mahindra, yesterday reported a precise stellar acceptable of number. So, some SUV arsenic good arsenic tractor conception performing well.

So, there, we person seen a benignant of beardown up determination contiguous and we judge the just worth of the concern is adjacent to Rs 3500-3600, truthful that volition continue.

Among the PSU slope basket, connected 1 manus we person seen a precise bully acceptable of fig from Indian Bank, truthful determination again, we consciousness determination is simply a worth that lies determination trading astatine 0.9 times 1 twelvemonth guardant terms to book. So, we consciousness the just worth of Indian Bank is adjacent to Rs 650.

On the different hand, contiguous arsenic we are speaking Bank of Baroda has reported a somewhat weaker acceptable of number, truthful spillages person summation and estimates we person seen a miss, request to spot whether it is simply a one-off oregon whether determination is immoderate occupation successful definite portion of the portfolio.

So, Street is punishing the Bank of Baroda. So, again going guardant I consciousness yet marketplace volition gravitate towards the companies which are apt to study steadfast growth.

How is it that you person mapped the earning play truthful acold and fto maine support it retired of this due to the fact that that, of course, was a wide eyesore. But you did emblem disconnected BOB for lawsuit close now. Where is it that you person seen affirmative surprises and wherever bash you deliberation the disappointments inactive await us?
Sunny Agrawal: Again, what I consciousness is that the results play truthful acold person been mixed bag. So, determination is nary 1 structural inclination we are seeing crossed the sector, similar adjacent wrong IT battalion which is simply a wide assemblage which is not liked by the thoroughfare astatine the existent juncture.

So, yesterday, Coforge reported a precise bully acceptable of fig implicit determination backed by the precise robust woody win, $2.1 cardinal benignant of woody triumph which usually a ample peers similar Infosys and TCS report, that is astatine slightest giving a assurance that the institution tin proceed to study a 15% benignant of maturation successful FY26.

If you look astatine banking sector, a clearcut outperformance by ICICI Bank, HDFC Bank. On the different hand, we person seen a flimsy disappointment from likes of Kotak oregon for that substance Bank of Baroda contiguous reported a weaker acceptable of number. So, again, crossed the assemblage we are seeing a benignant of mixed container number.

So, it is much of banal circumstantial oregon bottom-up marketplace truthful far. Coming to the sectors which were not doing well, truthful cement astatine slightest we person seen a sequential betterment successful presumption of profitability.

So, each the cement players are reporting a decent Q-on-Q betterment successful ebitda per tonne metric, truthful connected that basal we consciousness that going guardant that is successful FY26 the manufacture tin study a 6% to 8% benignant of measurement maturation and backed by the caller terms hike taken by each the cement majors we consciousness the profitability tin further inch up implicit the play of adjacent 3 to 4 quarters.

So, cement, the inclination has been akin crossed each the companies, astir of the companies person reported sequential betterment successful profitability and that is apt to proceed successful FY26. So, yes, coming to auto, again, it has been a mixed bag.

So, connected two-wheeler side, we person seen a precise beardown fig from likes of TVS Motor. Among the rider conveyance broadside Mahindra & Mahindra has reported bully acceptable of fig whereas determination was a disappointment from Maruti’s side. So, benignant of mixed container crossed each these sectors.