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India<br />
Strategy Note | January 1, 2019<br />
Figure 20: IT companies may appear attractive as they are<br />
trading near mean; however, due to US policy uncertainty we<br />
are underweight on the sector<br />
Figure 21: BSE energy index has not factored in likely earnings<br />
upgrades; we are overweight on oil marketing companies<br />
(OMCs)<br />
24.00<br />
22.00<br />
BEST _ PE ratio Average +1 Stdev<br />
-1 Stdev +2 Stdev -2 Stdev<br />
2.00<br />
1.90<br />
1.80<br />
BEST _ PB ratio Average +1 Stdev<br />
Title:<br />
-1 Stdev +2 Stdev -2 Stdev<br />
Source:<br />
Please fill in the values above to have them entered in your<br />
20.00<br />
1.70<br />
1.60<br />
18.00<br />
1.50<br />
16.00<br />
1.40<br />
1.30<br />
14.00<br />
1.20<br />
12.00<br />
1.10<br />
1.00<br />
SOURCES: CGS-CIMB RESEARCH, Bloomberg<br />
SOURCES: CGS-CIMB RESEARCH, Bloomberg<br />
Banks are our biggest Overweight and we particularly like<br />
corporate banks<br />
Figure 22: Most of the corporate banks are just coming out of the NPA cycle; hence,<br />
book value is depressed. As earnings revive, these banks are likely to perform well<br />
4.00<br />
P/b Ratio Average +1 Stdev<br />
3.50<br />
-1 Stdev +2 Stdev -2 Stdev<br />
3.00<br />
2.50<br />
2.00<br />
1.50<br />
1.00<br />
SOURCES: CGS-CIMB RESEARCH, Bloomberg<br />
Capital goods – valuations are low and signs of capex revival<br />
are apparent; Overweight<br />
9
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