2023 will be a volatile year; use stock rotation and buy on dips: Sandeep Tandon

“The next couple of years should be better for pharma companies as the pricing outlook keeps on improving and the cost pressure is moderating as well for inputs like APIs, chemicals, etc. So, generic companies or those with a good specialty portfolio, should do well in the next few years.”

Capital Mind's Deepak Shenoy says now is a good time to invest in stocks despite some unexpected bad numbers from some companies. He sees significant growth in sectors such as chemicals, railways, defence and infrastructure, and despite scepticism about a rally in midcap and smallcap pricing, he is investing more. He sees Reliance Industries as a sum of the parts valuation.

Elixir Equities Director, Dipan Mehta, argues that new age companies such as Zomato, Policy Bazaar, Nykaa, and Paytm are stocks of the decade of the 2030s and could be huge multibaggers over the next 5-10 years. However, these companies are still in their investment phase, which reflects in their P&L, although they are making strong efforts to get into EBITDA positive. Regarding concerns about Page's decline, Mehta suggests that a demand slump due to higher inflation and uncertainty around weather patterns may have impacted Page industries.

“There is a certainty in India that one allows one to think from a 15-20 year perspective. There is a kind of money which we are expecting. I will be personally very surprised that after May election, political instability, if $100 billion does not come in India through bonds and equity. Normally $15-20 billion comes.”

The standout advantage for JFS is the extensive distribution network of its parent company, Reliance. With Reliance Retail boasting a customer base of approximately 25 crore and Reliance Jio with a base of around 44 crore customers, JFS has access to an enormous customer pool. This physical and digital reach can be a game changer, allowing JFS to quickly expand its customer base and offer a variety of financial services to a vast audience.

“There is a mini bubble in the broader market and one needs to be selective about that. Do not be too quick to jump into an index which has gone up 35% and stocks that have gone up 3X-5X. Okay, the stock has corrected 5%, 10%, let it stabilise, do some homework and then start nibbling.”

The relentless selloff in India may be influenced by the situation in China, where there are rumors of further attempts to support their domestic stock markets. Some foreign investors may be tempted to switch their investments from India to the oversold and cheap Chinese equities. Despite short-term pressure on the financial sector, it offers fantastic opportunities for medium- to long-term investors. IT and healthcare sectors, viewed as more defensive, have been strong performers. India still presents a good longer-term investment story, although there may be some money flowing into China if it outperforms.

Stocks of defence firms surged in past few yrs, by over 1,000% in some cases, driven by narrative that they would gain from govt’s domestic procurement push. Now, those stocks are tanking.

So, investors should be aware that just because India is doing well, it doesn't mean that markets will continue to move only in one direction. As an investor, you must focus on quality, buy good companies run by good managers and those available at a good price. Retail investors have the luxury of taking a longer term view. They don't have to worry about 6-12 months performance or the volatility and so on and so forth.

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