Longer term growth for private banks can be faster than industry: Karthikraj Lakshmanan, UTI AMC

Anshul Saigal says some people are holding cash but I would say the majority are not holding cash. What that means is that the majority are not expecting a meaningful correction while some are expecting a meaningful correction. An investor who is looking for defensives should go for FMCGs. An investor who is looking for long-term wealth creation should look at QSRs. And there are now multiple opportunities in that space to make money over the next few years.

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.

State elections can create short-term volatility, but the outcome of the General Elections 2024 is a key monitorable, says Dikshit Mittal, fund manager of LIC Mutual Fund.

“For India, it is a good situation to be in where you have moderating global interest rates, a not so strong dollar, and not a crashing global economy. Inherent strength of domestic consumption should carry us through. Plus, the capex cycle which is just picking up should see us through the next two to three years.”

Coming to consumer stocks, it is better to be pretty selective right now. I expect one more quarter of subdued volume growth. But my sense is that with the onset of the festive season post September onwards, we will start seeing consumption doing pretty well across most of the categories. So players who have really established or have a strong foothold in terms of their products, in terms of pricing and target customers like Trent are doing exceedingly well.

Aequitas Investments, a small and mid-cap investor, is still finding companies in the small and midcap sector with inexpensive valuations and continues to invest in them. While there is froth in the small and mid-cap space, there are still pockets with attractive valuations. Aequitas Investment's small-cap strategy has been the top performer in September, driven by long-term calls in sectors such as infrastructure and manufacturing. Thematic funds focused on India's growth story are expected to do well, but it is important to enter at the right stage

We believe manufacturing and allied industries like auto ancillaries, metals, defense, textiles, capital goods, utilities, logistics, corporate banks etc. will continue to remain under spotlight in the year ahead given the macro and micro tailwinds. We continue to have a favorable outlook for the banking industry, which is fueled by strong growth potential from rising loan growth and falling credit costs.

According to Raamdeo Agrawal, Chairman of MOFSL, pure internet companies such as Zomato, Swiggy, and PolicyBazaar can become large players in terms of profit pool. Companies like Bajaj Finance, Zerodha, and Angel One, which are traditional businesses leveraging the power of technology, are also poised for accelerated growth. Another area for growth is the real estate industry, which is showing profits after years of losses.

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.

“Just because BJP has won the elections and the probability of them coming back with a bang in May is extremely high, it does not make sense to buy the stocks where the results will not be there because this market is in a phase where there is a lot of rotation happening. If the results do not follow through, you are going to be disappointed.”