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Eyeing Budget session; +ve on infra, industrials: Deutsche

With the Budget behind, investors are now looking forward to the Budget session in Parliament, where the government is expected to push through four crucial legislations, including on insurance, coal mining and land acquisition, Deutsche Bank MD and head of research Abhay Laijawala told CNBC-TV18.

With the Budget behind, investors are now looking forward to the Budget session in Parliament, where the government is expected to push through four crucial legislations, including on insurance, coal mining and land acquisition, Deutsche Bank MD and head of research Abhay Laijawala told CNBC-TV18 in an interaction from the sidelines of a conference the investment bank is holding in India.

“The mood at the conference is cautiously optimistic [with respect to the Budget session],” Laijawala told Latha Venkatesh and Sonia Shenoy, but he added that post the Budget the mood had definitely shifted in favour of cyclical stocks.

“Some of the measures announced in the Budget – the National Investment and Infrastructure Fund or the plug-and-play model (for power projects – were brilliant,” he said.

Deutsche would look across the infrastructure landscape and was positive on building materials, logistics, cement and the private banking space, the MD said. It was underweight on IT.

Analysts at Deutsche were expecting earnings to grow 16 percent this year, which brings the price-to-earnings multiple to 17 times forward – or a 9 percent premium to historical average – but in the context of global growth, India looked attractive, Laijawala said.

“51 percent of our imports constitute commodities such oil, gold, silver and fertilizer [which have fallen significantly,” he said. “In the emerging markets space, India stands out with its credible inflation targeting process and currency stability.”

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