A scorecard
| Sector | On the positive side | On the negative side |
| Aluminium | Domestic infrastructure spending and capacity expansion led growth | Pricing environment could turn adverse, but not in the near term |
| Automobiles | Robustness in industrial sector accompanied by softer interest rate to support growth, but at a lower rate | Peaking efficiency levels and valuations running ahead of earnings for most players |
| Banks | Non-food credit off-take on the corporate side and stable retail loan demand | Can advances keep pace if interest rates rise? Scenario of lower other income. Regulatory situation in a flux |
| Cement | With demand-supply situation favorable, prices could increase at a faster rate | Fresh capacity expansion announcements to affect valuations |
| Engineering | Private and public spending in infrastructure promising | Performance failing to match expectations and the likely impact of the same on valuations |
| Oil and gas | Stable demand side prospects and valuations | Crude prices and the government's stand on pricing |
| Fertilisers | Supply exceeding demand and loosening of production constraints | Gas pricing scenario and excessive governement control |
| FMCG | Growing middle-class populace and rising per-capita income should reflect in demand going forward | Margins plateauing, increasing competition and valuations reflecting growth in the near-term |
| Hotels | Occupancy and ARRs to remain robust | Geo-political uncertainities |
| Media | Robust growth in subscriber base and pay channel model gaining acceptance | Progess on CAS implementation and revival in adspend |
| Pharma | Barring near term visibility concerns, long-terms signs are positive | Who will benefit the most i.e. R&D, generics or contract manufacturers? The laggards may lose premium valuations |
| Power | Highly linked to the pace of capacity expansion. Distribution to throw some surprises | Political intervention and valuations running ahead of fundamentals |
| Software | The case for outsourcing strengthening each day | Not all companies are positioned well. Stretched valuations for select stocks |
| Steel | Infrastructure spending provides demand side cushion | Softening prices, import competition and plateauing efficiency levels |
| Textiles | Post 2005 quota regime posts big opportunities combined with a stable domestic demand situation | Firm cotton prices and valuations running ahead of fundamentals |
As we have maintained earlier, stock markets always tend to wait for a trigger. While there are genuine concerns, investors have to realise equities are a better asset class to be invested in for a long term, usually three to five years. Depending upon one's risk-return profile and keeping the aforesaid opportunities and concerns in mind, invest in a staggered manner and utilise this weakness in the market as an opportunity for the long-term.
