What is your take on the Infosys numbers? It has done much better than its counterparts. How do you think the stock could trade today?
Nischal Maheshwari: Yes, Infosys says there has been a positive surprise but a bit of a disappointment is that the guidance that they have given is a bit muted than the market was expecting. So, as far as the outlook on the company is concerned, its better than most of the other stocks or the largecaps which have guided either for a negative or a 1% to 2% kind of a number for the current year. Infosys definitely has done better than that and it would be in the green today. But I would have expected a better guidance from 1% to 3%.
Do you believe that the mid and small-sized IT companies can pick up from the sentiment they are getting from Infosys because within the IT largecaps, Infosys has managed to come out with good guidance and happened to surprise on their order book. Do you believe that now is the time to look out for some of the other and broader markets IT stocks?
Nischal Maheshwari: It is still one or two quarters away. IT companies have given a muted guidance on the top end because of the macros. Most of these companies are saying that the macros are still very uncertain and that is why they are not able to guide very strongly. I would wait out for another one or two quarters before turning positive on IT. As far as IT midcaps and smallcaps are concerned, stock-specific is the way to go because we are still not seeing wind behind the sail so that all boats can rise.
How is the pharma sentiment picking up within the investor community? Is it good to expect that the pharma space in the short term can underperform a bit because of late, we have not seen much participation from the large names?
Nischal Maheshwari: Everybody is a little bit worried about the way the tariffs are going to play out in the US. The Trump administration from time to time has been threatening about 100%, 200% tariffs and nobody really knows which way it will go. That is where the market is a bit worried about and people are going from a day-to-day, week-to-week situation. But in a broader sense, within pharma, the CRAMS space is doing very well and the China-plus-one thing is working out very well.
So, several stocks have done really well as far as the CRAMS space is concerned. My preference is for the CRAMS space because it is a little bit less dependent on how the tariff thing is going to play out as far as the US is concerned and that is why the China-plus-one strategy is also playing out well. I prefer the CRAMS space within pharma.
What is your take on the entire consumption space given the kind of numbers we have seen from Tata Consumer? It has been a largely muted or neutral quarter for Tata Consumer. While salt has done well, tea has seen double-digit growths as well. What is really concerning is the 80 bps market share loss in tea. Other than that, the underlying volume growth is looking steady at 6.8%. What would your pecking order be within the large pure play FMCG stocks?
Nischal Maheshwari: Unfortunately, I do not track Tata Consumer, so I would not be able to comment on that. But in the broader space within the consumer, the second half is where we are looking for a strong resurgence both in terms of volume as well as pricing. This quarter is going to be not muted but a bit more encouraging. The commentary is what one should focus on because a few other companies, especially on the consumer side, have been saying that they are seeing some green shoots. That is why one should be a bit patient with the consumer sector. All the broader macros are in place like interest rate cut, income tax cut, and a good monsoon. These help the consumer sector grow, so wait for it. Remain invested in the consumer sector.