Expect some correction in Oct-Nov, may increase cash in portfolio: Sandip Sabharwal

In 1999-2000, the market cap of Asian Paints was ~$200m, just 2% of the largest consumer company then, Hindustan Unilever. Today Asian Paintss market cap is $35bn, more than 50% of Unilevers! Titan was a tiny cap during 2001-4 (the lowest was in 2001, a market cap of $25m, vs $40bn now!) when it entered the jewellery segment and changed the industry.

“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.”

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.

International Business News: International Monetary Fund chief Kristalina Georgieva warned on Sunday that risks to financial stability had increased and stressed "the need for vig

Bajaj Allianz Life Insurance's Sampath Reddy, prefers value-oriented stocks over growth and expects the market valuation to peak between 19 to 20 times PE in the coming year. Although the market valuations are slightly high, the Indian macro economy is performing well in terms of GDP growth and benign inflation, driving higher valuations. Reddy notes the shift from growth to value-oriented, higher-interest rate-sensitive utility sectors and believes it will continue.

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.

“In infrastructure, I would look at companies that are able to manage their cash flows better and even a company like Mazagon Dock has amazing cash flow management for what is otherwise a government company. They have net cash on their balance sheet because they get paid in advance. Some of those aspects matter more.”

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Mrinal Singh, CEO & CIO of InCred AMC, discusses the challenges of investing in the Indian market due to expensive valuations. He highlights the potential for growth in rural areas, the building material sector, and the auto sector. He also expresses interest in the housing and MSME segments of the financials sector, as well as the healthcare sector.

“There are four-five stocks in each of these three themes in addition to the digital space and that is how we create our 20-stock portfolio. The concentrated approach in midcaps and smallcaps really makes sense rather than a diversified portfolio. But in the next six months, markets can head anywhere because flows are determining the returns today and the reality will come out only when the flows stop. ”