Indian Markets - Credit Suisse - 26.05.2021
Indian Markets - Credit Suisse
• Reverse our Overweight on metals added in Dec-20 and earlier
• P/BV relative to market is near 10-year highs
• Current surge in apparent demand is an extreme inventory cycle and not a super-cycle
• With Al to-steel price ratio near a two-decade low, we move from Tata Steel to Hindalco
• Similar trends are likely driving chemicals too & firms with pricing power should benefit
• Add to Asian Paints & Ultratech due to relative P/B for sector Concerns on adverse seasonality and weak low-income discretionary demand offset by firms-specific factors
* We stay Overweight on Banks (SBI and private banks) Stay UW on IT, but cut HCLT ( switch weights to TCS weak EPS revisions)
* Cut Staples to Market-weight (cut NEST, add smaller weight Maric of Marico)
