Underperformance in infrastructure stocks will continue for the next few quarters: Avinash Gorakshekar

Avinash Gorakshekar, VP Research, Edelweiss Financial Advisors in an interview with ET Now talks about infrastructure stocks.

Just looking at what has happened to the infrastructure space people spoke about these stocks when they had halved, they have halved further from those levels also, how much further, what about the IVRCLs, Nagarjuna Constructions of the world?

My guess is there is lot of pain left not only for infrastructure even for real estate. So the stocks which have been shown up, which have showed new lows clearly the market is giving a clear indicator to the kind of performance these companies are going to record.

With earnings growth likely to decelerate especially in infrastructure, my guess you will probably see infrastructure being a neglected space and we would also like to be little cautious on that segment because we feel that at least till the second half of this year I think you are going to see lot of more pain coming on the balance sheets as well as on the cash flows of infrastructure player.

So despite the fact that valuations look attractive they have come down significantly I think the market is obviously worried about the kind of growth. In the last one year these stocks have clearly underperformed so probably now market participants are clearly cautious on the sense that probably despite the fact that valuations have got attractive I think the bigger earnings trigger is missing so that extent I think this underperformance will continue for at least a couple of quarters.