Business
CSB Bank a rerating candidate, buy-on-dips strategy advised: Sunny Agrawal
The realty index outperformed the broader market, gaining around 2%, led by stocks such as Sobha, Lodha Group and Prestige Group. Market participants are increasingly hopeful that the December quarter could mark a turnaround for the sector after a difficult 2025.
Sharing his perspective on ET Now, Sunny Agrawal from SBI Cap Securities said, “It seems to be looking at Sobha’s provisional business update, it seems that December, being a seasonally stronger quarter, the festive season, usually real estate companies tend to do well in terms of sales momentum.” He added that the December quarter should be robust in terms of pre-sales across most real estate companies, particularly in micro-markets like Mumbai, where registration data has remained strong.
According to Agrawal, “Companies which are focused on the Mumbai real estate market, case in point Lodha for that matter, Sunteck Realty, so a few Mumbai-based players are likely to do well.” He pointed out that real estate has been one of the worst-performing sectors in calendar year 2025, but easing interest rates from recent highs could help revive demand going forward.
He also noted that valuations have become more comfortable after the correction, making selective stocks attractive. “Selective real estate companies can be looked upon, case in point Lodha, DLF, Prestige or Sobha, which have got an ability to penetrate into other markets to ensure that the sales momentum will continue for a longer period of time,” Agrawal said. He also flagged Raymond Realty as an interesting recent listing, citing attractive value relative to its growth potential and current market capitalisation.
The FMCG space was another area of discussion, buoyed by a strong quarterly update from Marico. The positive sentiment spilled over to the broader FMCG pack, raising expectations of a better December quarter for the sector.
Agreeing that the momentum could sustain, Agrawal said, “With a very strong update from Marico, it has definitely had a rub-off effect today on the entire FMCG pack.” He explained that the September quarter had seen supply chain disruptions due to GST rationalisation, while the December quarter, aided by the festive season and normalisation of supply dynamics, should deliver healthier numbers. He also highlighted favourable cost conditions, noting, “On the cost side, we have seen a benign input material environment for most FMCG consumer staple companies.” Among stocks likely to report a strong December quarter, Agrawal named Britannia, Tata Consumer, Zydus Wellness and winter-focused plays such as Emami.
As a contrarian idea, he pointed to Colgate. “Colgate, we feel, now valuations have turned favourable and risk-reward seems to be attractive at the current juncture,” he said, suggesting gradual accumulation for portfolios.
On the banking side, Agrawal shared a positive view on CSB Bank following strong provisional numbers. “A very strong update by CSB Bank as far as the provisional numbers are concerned, and the stock is reacting to that,” he said, describing it as one of the fastest-growing banks, driven largely by its gold finance book.
He added that the bank’s September quarter performance was also robust and sees it as a potential rerating candidate. “As we speak, it is trading closer to 1.6–1.7 times one-year forward price-to-book, where we feel, as compared to other larger peers trading closer to 2–2.5 times price-to-book, there is still scope for further upside,” Agrawal noted. However, he advised that a buy-on-dips approach may be more suitable from a medium- to long-term perspective.
Overall, easing rates, festive demand and improving fundamentals are prompting investors to selectively revisit sectors that have lagged over the past year, even as broader market valuations remain a key consideration.
