GST passage will give cos’ confidence for capex push: Emkay

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As far as Infosys goes, despite the good numbers reported by the company, it did well on the bourses due to subdued earnings expectation, says Sachin Shah, fund manager, Emkay Investment Managers.

If either the GST Bill or the Land Acquisition Bill get passed in this session of the Parliament, it will be a huge positive. The corporate sector too will get more confidence to undertake capital expansion, says Sachin Shah, fund manager, Emkay Investment Managers.

In terms of corporate earnings, he says most of the earnings estimates haven’t changed materially. As far as Infosys goes, he says despite the good numbers reported by the company, it did well on the bourses due to subdued earnings expectation.

Shah likes Bajaj Corp in the FMCG space.

Below is the verbatim transcript of Sachin Shah’s interview with CNBC-TV18’s Anuj Singhal and Ekta Batra
Q: What is your expectation in terms of the GST how do you think markets will react if in case in its current form it is passed through in this session?

A: It will be fairly positive if they are able to get through this in this session itself because with the kind of political noise that we have had in the last few weeks, clearly the expectations are now very subdued. So, from that perspective yes if the land acquisition and the GST both of them or even if one of them actually gets through in this session itself, not only the market but particularly from the GST a lot of corporates would be fairly confident about doing their new expansion plans because when I meet some of the corporates, everybody talks about if GST comes we plan to do this, we plan to do that, so once there is a clarity on that front, we could see some movement on the ground level also in terms of the investment plans.

Q: What is your take on midcaps?

A: In terms of the results, one stock which we own and one where the results were good or rather decent was Bajaj Corp in the FMCG space. They have done a pretty good job in terms of their market share and profitability they was fairly decent. So, that is one company which looks decent to us even at this point in time.

Disclosure: As I mentioned, we own Bajaj Corp and also Infosys

Source: Moneycontrol.com

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