ETMarkets Fund Manager Talk: Increased allocation to industrials on strong tailwinds for manufacturing: Pi

Pawan Kumar advises caution in the Indian market due to heightened volatility and valuation premiums in mid & small-cap stocks. Customized asset allocation based on individual factors is recommended for FY25, with a neutral stance on the Indian Equity market.

India is on the brink of a multi-year growth cycle driven by capital expenditure, credit growth, consumption, and corporate profitability, according to Devang Mehta, Director of Equity Advisory at Spark Capital Private Wealth Management. Mehta also stated that sectors related to credit growth, financials, and capital expenditure are likely to lead the next phase of the market rally. Rising oil prices, a depreciating rupee, and the negative impact of the US market are concerns for the Indian economy.

Leaving aside the endowment bias, we reckon that a simplistic platform like smallcase is one of the best ways to encourage the investing culture in India. You see, in todays day and age, simplicity is all one looks for given the clutter in the market. So, there is no donut that smallcase has been one of the best technological innovations in Indian markets.

Sectors like banking and financial services, railways, infrastructure, and defence are likely to continue being favored sectors. Select manufacturing companies could perform well due to PLI schemes and production base diversification. The themes for the next few years are manufacturing, renewables, digitisation, infrastructure, urbanization, premium consumption, financialization of savings, and the rise of equity savings cult.

In this hype, many retail investors are rushing into the market. They may be influenced by the euphoria of Nifty at all-time highs and fear of missing out. However, in this rush to participate and benefit from the markets they are ignoring the risks associated with it. Risk is inseparable from the world of investing.

Stock Market today- Indian Stock Market gained and indices hit record highs for second straight day. Analysts remain positive of domestic focused stocks. PSU banks and PSU stocks in power, energy, defence, cap goods, NBFCs, as- well-as sectors as real estate and Cement are where experts see value.

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.

Optimism about the world’s second-largest stockmarket is a distant memory | World News

Large caps led Friday’s rally, with support from small and medium caps.

There are some sectors where the macro structure is such that for one or the other reasons the overall growth is higher. This is not to say that growth comes without phases of slowdown, but when tailwinds come they are able to take care of all the slowdown and over a period of time, growth is much better. So, at times valuations are high, take exposure to stocks and sectors where at least there is high probability of growth ensuring that over a period of time, valuations get normalized. When we talk of market size it is not only India but in some cases global markets also. Second, look at business that is bound to grow as markets expand and every transaction brings in some money to the topline and industry structure is such that cost does not grow in the same proportion leading to higher and stable margins.