Expert View: Bully on Indian Stock Market for long term despite personality

Expert view: Vinit sambre, the head of equities at DSP Mutual FundIs positive about the Indian Stock Market for the Medium to Long Term, Expecting Healthy Corporate Earnings. In an interview with mint, sambre shared his views on key triggers that will shape the market, Outlook for the mid and small-sp segments and sectors he is positive about. Here are edited excerpts of the interview:

How do you see the market’s performance in the first half of the year?

Macroeconomic indicators are showing signs of improvement, setting a constructive backdrop for the markets.

Some key developments include aggressive cuts in the last five months, which should support consumption and credit groups, credit growth, Easing, Primarily Driven by Softening Fill Tax Relief through Higher Minimum Income Slabs, Expected to positively impact Nearly 20 Million Taxpayers and Boost Disposable Incomes, A Normal Monsoon Outlook, which bodes bodes wll for agricultiral Output and Rural Demand and Benign Commodity Pries, Helping Keep Input Costs in Check.

Togeether, these facts are expected to benefit both the low- and middele-income segments, potentially driving a broad-based consumption recoverry.

Additionally, corporate earnings should see an uplift not only from this improving macro setup but also due to the low base of fY25, Amplifeing Growth Figures.

While Some Earnings Volativity May Persist Over the Next Quarter or Two, The Overall Outlook for Equites Remains Positive Over the Medium Term.

AMID Global and Tariff-Related Uncertains, Do you can end the year with modest gains?

INTEAD of offering a traditional year-end market outlook, i’d like to approach the question from a different percent.

We must come to terms with the fact that Uncerty is here to stay. Our base case is that environment will remain Volatile, and it will be Increasingly Dificult to AnatiCipate, Calculate, or Price in the Variety of Risks Emerging – Whistle from TARIFFS, Geopolitics, or shifting policy landscapes.

In such a world, our focus as portfolio manners is to outside businesses that can endure and thrive.

Specifically, Companies that have Built Strong, Defensible Franchies, Anchored in Competitive Moats, and Have Consistently Proven their ability to navigate to navigate through Disruptions.

After all, Markets are Simply a Reflection of the Aggregate Health and Performance of Individual companies.

And we see no shortage of companies in India that are steadily building

That Gives Us Continued Conviction in the Medium to Long-Term Outlook for Indian Equites.

What are the key triggers that will shape the domestic market in the medium term?

As mentioned in the earlier answer, our core assumption is that A Combination of Supportive Factors – Including Tax Benefits, Lower Interest Rates, Easing Infection, and A Positive AGRI OUTULOOK – AGRI OUTULOOK – Recovery in Consumption, which in turn should support corporate earnings growth going forward.

However, Any Risk That Challenges This Theseis-Whtherra Macroeconomic or Sector-Specific-Cold Make it Difentials for Current Elevated Valuations to Hold. If companies fail to deliver on growth expectations, Market Volativity is likely to follow.

What is the outlook for the mid- and small-cap space? Given Heightened Uncertainty, Should We Tilt More Towards the Large-Caps?

Mid and Small Caps Have Witnessed A meaningful Broadening of Opportunities Over the Past Few Years, Driven by the Emergence and Participation of New Sector Such as Electronic Manufacturing, Insuriation, Insuroncity Commerce, Platform Companies, Wires and Cables, Speciality Chemicals, Healthcare (Hospitals, Diagnostic Labs), etc.

This has expanded the investment universe beyond what is typically available in the large-cap space.

This shift has lad to green segments into segments, resulting in elevated valuations.

However, in many cases, these Valuations appear justified giving the Stronger Growth Prospects and Structural Tailwinds Supporting Some of these sectors.

We believe that mid and small caps offer a compeling long-term options to invest in high-Quality Businesses that are tapping into underpentrated and fast-going segments of the economy.

While Market Volativity May Lead to Near-Term Uncertain, Investors with a five to Seven-Yaar Horizon are well-postioned to Benefit from the Potential Wealth Creation These Busineses Kan Offer.

What sectors are you looking at for the next two to three years?

With the decline in interest rates, we hold a constructive view on Several segments of the market.

We are particularly positive on Consumer Discretionary Businesses, which are likely to benefit from improved affordability and raining demand.

We also see lending institutions-especially NBFCs-as well-positioned to capitalise on lower funding costs and potential creedit growth.

In addition, specialty chemicals have emerged from a subdued cycle over the past three years and outs a meaning a meaningful recovery.

Lastly, within the energy sector, we are optimistic about selects that stand to benefit from the Increased Capital Expenditure Linked to the Onergy Transition.

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Disclaimer: This story is for educational purposes only. The views and recommendations about individual analysts or broking companies, not mint. We Advise Investors to Check With Certified Experts Before Making Any Investment Decisions, As Market Conditions Can Change Rapidly, and Circumstances May Vary.