Materials space may come under pressure: Principal Global Investors

Chandgothia Binay, Chief Investment Officer, Principal Global Investors (Asia) in a chat with ET Now talks his perspective on the earnings reports.

Coming to corporate earnings, the recently concluded earnings season in India, what sense did you get out of it? Where did things go according to expectations? Where were you delighted and which sectors are potential sources of concern?

The sector, which clearly stands out those materials but if you look at the history, the last three months, six months, you have had much bigger increase in metal prices globally but that’s also the sector where you have potentially the highest headwinds going forward if you look forward.

Let’s say the case of say what’s happening globally in the last say month or so and if these concerns intensify, the recent package notwithstanding, materials is one sector, which is going to come under pressure, so therefore, from the futuristic earnings prospective, may be that’s a sector one has to be very careful about despite the fact that, that sector had the best performance in terms of the actual numbers beating estimates.

IT was cured, pharmaceutical was broadly good except a few one or two cases. In addition banking turned out to be better and banking is one sector where you could see interest coming back. For example if say oil and commodity prices remain soft and people start proceeding that, may be rate hikes are not going to be as aggressive in India as they were perceived to be till last month. That’s one sector where you could see some amount of investor interest coming back.