ETMarkets Fund Manager Talk: This fund manager is betting on 3 major themes to play on the India growth st

Carnelian Capital Compounder Fund aims to invest in a concentrated portfolio of 25 long-only stocks within its QARP framework, focusing on capturing the trillion-dollar Indian market opportunity. In response to macro headwinds and geopolitical issues, all flagship schemes have reportedly delivered decent outperformance versus its benchmarks. The portfolio is reportedly evaluated within two broad baskets--Magic (50%-60%) and Compounder (30%-40%)--to identify companies with visible change and a blend of sustainable earnings growth.

“If you look at the kind of companies where the stocks are going up even more are the ones that are not even covered by many research houses. So the stocks that are the smaller ones, not in any coverage by the sell side are still seeing a lot of rally. So clearly, there is some irrationality.”

Smallcap stocks are in bear territory, with losses up to 84% from high levels. Nifty Smallcap100 index was down 14% from peak. Worst losers include Ramky Infrastructure, Andrew Yule, IFCI, PTC India Financial Services, AGS Transact Technologies, Swan Energy, Railtel, and RVNL. Market experts weigh in on the situation.

This continued upbeat show of the companies in the broader market has played a significant role in driving stocks higher and turning many of them into multibaggers.

“India is a hugely exciting market for us and a major focus. We are putting a lot of emphasis on the market. There’s been a lot going from financing options and trade-ins to make products more affordable and give people more options to buy,” Apple CEO Tim Cook had said in February.

Speaking at AIF & PMS Conclave 1.0 Summit, Sharma said the Indian market offers a huge opportunity in terms of bottom up companies. Market opportunities in India are huge. Irrespective of foreign flows, India has done well and will continue to do well.

India will maintain a premium valuation due to its rapidly growing economy, progressive industrial policies, and strong corporate earnings growth.

Kotak Mahindra AMC managing director Nilesh Shah advocated greater public-private partnerships for state-owned firms to unlock wealth that will fuel India's growth.

Steady demand, lower input costs and stable interest rates supported the performance of corporate India in the September quarter. The energy and automobiles sectors contributed the most to India Inc.’s profitability. As many as 490 companies of the Nifty 500 index reported an aggregate revenue and net profit (adjusted for extraordinary items) growth of 1% and 43%, respectively, on a y-o-y basis. Excluding the financial sector stocks, the aggregate EBITDA of 405 stocks grew 40.7% y-o-y.

PC Jeweller was the top gainer in the smallcap pack with nearly 60% return, followed by Salsar Techno (31.6%), Gallantt Ispat (28%), and Sangam (26%).