Is the worst over for market? Don’t be so hasty, says Nitin Raheja

Kotak AMC's CIO Equity, Harsha Upadhyaya, highlights the growth potential of banking, industrials, autos, and cement sectors in the Indian economy. Banking is set to have significantly higher earnings growth over the next two years as compared to the broader market. However, Upadhyaya does not see the auto sector continuing its rally due to lower-than-expected volume growth. Instead, the growing demand in the capital goods industrial segment, driven by overall investments from the public and private sector, may be a preferred area of opportunity to outperform the market.

“ if you look at most of the largecap names like Reliance, HDFC Bank and if you look slightly longer over the last say 12 months or so, even ICICI Bank has not done anything. Given the fact that both Reliance and HDFC Banks stocks have got a considerable weightage and they have not performed, that actually makes the case that when they start performing next year, there is a good probability that the largecaps might outperform midcaps for some time.”

Indian markets are likely to continue their rally thanks to benign liquidity, stronger-than-expected results so far in the current quarter, and diminishing pressures on pricing. Underperforming sectors such as pharmaceuticals as well as capital goods, consumer durables and defence companies offer good opportunities. Stocks of safe bets, like ITC, Britannia and HUL, are doing well due to favourable valuations and strengthening ownership in a scenario of intense uncertainty before the election.

Nimesh Chandan, CIO of Bajaj Finserv Asset Management, believes that the markets have reached fair and higher than reasonable valuations. A change in approach is necessary, and investors should look for bargains in undervalued areas. The paint industry is experiencing an influx of new players, which may impact existing players' market share and valuations.

From the valuation parameter, the price to earnings ratio has gone from 24 to 19 times. In price to book, we are below the 10-year average. If you look at the earnings yield, it is roughly about 5.6%. If you look at market cap GDP, we are at 94%. The peak was about 112%. In the last 18 months, the total economic growth, the GDP growth is 20%. For Nifty, it is minus 9%.

Sandeep Raina is not worried about the market crash. Further small cuts are possible, but it's not a bloodbath. Stay invested, the market will revive. Quality midcaps, smallcaps, and largecaps with 20% growth, good ROCE, and cash flows are worth investing. Pharma stocks like Beta Drugs, Kilpest, and Sun Pharma are interesting.

“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.”

Silicon Valley Bank crisis is a near term sentiment, which won't last long, say stock market experts

Pankaj Tibrewal of IKIGAI Asset Manager discusses market trends, emphasizing trust, performance, and purpose. He advises on investment opportunities in pharma, chemicals, and private banks while cautioning against risky stocks and advocating selective stock picking. He also says: We believe that the recent correction is very small compared to the larger returns in the past one year.

“With commodity prices falling, we are going to see margins increase. From an overall situation, I would rather see that the consumption pack sacrifice margins for growth at this stage because that will have a multiplier effect on their own business and the economy. Getting growth back is positive because capacity utilisation has kind of frozen.”