Agrawal said the September sales slowdown was largely driven by a high base from last year and the shift in the festive season calendar rather than any structural weakness in demand. He also expects opportunities in power transmission equipment companies following the PM Developing Harmony and Accelerating Renewable Energy Access (DHARA) scheme and remains selective on recent IPOs.
Explaining the weak September sales numbers, Agrawal said, predominantly a large base effect of September along with the shift in the festive season had weighed on volumes.
“We should see further traction in the demand environment… especially in the two-wheeler, passenger vehicle and commercial vehicle space,” he added.
While tractors may remain under pressure due to a weak monsoon and a high base, Agrawal remains constructive on the broader automobile sector.
TVS Motor remains the preferred pick
Among two-wheeler manufacturers, Agrawal said TVS Motor is his preferred stock, expecting the company to report 18-19% sales growth.
He also sees value emerging in Bajaj Auto, noting that while domestic sales have softened, exports continue to remain strong.
PM DHARA scheme strengthens cable and transformer outlook
Commenting on the Cabinet-approved PM DHARA scheme for renewable power transmission, Agrawal said he prefers to play the opportunity through transformer manufacturers and cable & wire companies.
Despite increased competition after UltraTech entered the wires and cables segment, he believes established players will continue to benefit as demand shifts from the unorganised market.
He said Polycab remains his preferred pick in the segment, adding that UltraTech currently competes in only about 30% of Polycab’s product portfolio.
Selective on recent IPOs
Agrawal also highlighted SS Retail as one of his preferred recently-listed companies, citing its expansion strategy and exposure to rising smartphone consumption.
He also likes Glass Wall Systems as a play on residential and commercial real estate activity, while recommending a buy-on-dips approach after the sharp rally in the stock.
On technology listings, he said INDO-MIM and Dhoot Transmission remain quality businesses but also favours buying on corrections.
However, Agrawal is cautious on ESDS, saying much of the upside has already been reflected in the stock price.
“Opportunity size is humongous, but valuations are not comfortable at the current juncture,” he said, adding that he would rather gain exposure to the data centre and semiconductor themes through power ancillary companies instead.
For the full interview, watch the accompanying video
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