What is your Medium-Term Outlook for the Indian Stock Market? Does It Lack Triggers to Scale Fresh Peaks?
The medium-term outlook is positive, albeit with risks in the background, and there are quite a few potential triggers which can potentially take the market to new highs.
Macro conditions in India are firming up. GDP for Q4Fy25 Surprised positively at 7.4 per cent, driven by a steady expansion in private consumption on the rural side and Capex Momentum in Government Spending.
CPI Inflation Eased to 3.2 per cent, Staying Well Bell the RBI’s upper tolerance. Forex reserves climbed to $ 693 billion, liquidity conditions turned surplus, and the manufacturing PMI remained robust at 57.6, signalling sustained sustained Momentum.
May Saw the Highest Monthly FPI Inflows in Eight Months, While Diis Continued their Net Buying Streak.
The market has re-rated sharply over the past year, but with forward earnings growth of 12-15 per cent, supported by private capex, corporate deleveraaging, and Strong Domestic Demand, these’S Optimism.
The Recent Terrorist Event and India’s Swift, Decisive Response Led to a SURGE in Domestic Confidence.
Strategically, India’s Firm Stance Against Future Attacks and its Demonstrated Military Precision Added to the Country’s Geopolitical Credibility.
RBI provided an extra boost to growth sentiments with a sharp rate cut and crr cut, clearerly indicating a pro-road stance as inflation is under control.
The global backdrop is positive, and many central banks are cutting rates. Overall, Financial Conditions are Easy and ConduCive for Risk Assets.
Do you see any risk of a deaper correction?
A deaper correction would be probally be triggered by external factors raather than internal.
Trade wars, currency Volativity and other geopolitical issues may impact the markets in the short term.
What is Driving Fresh Momentum for Mid and Small-Cap Segments? Do you see value in these segments?
The Midcap and Small-Cap SEGments Had Seen a Time and Price Correction in the last six months. This LED to Valuations Going from Expected to a more Reasonable Zone.
The earnings season have been quite good for midcaps, which has triggered the success of these and small-caps.
Most of the sector Doing well are the only that did well in the previous run. And now, with the RBI Policy, even the Financials are catching up.
What sector can potentially outperform in the next one to two years?
We Continue to Believe that the domestic sectors will do better than the global sector.
We are positive on Financials, Industrials, Selected Utilities and Selective Consumer Discretionary Segments.
The other places where we see good growth on a long-term basis are segments like power transmission, distribution, railways, defense, renewables, etc.
Do you think the defense and psu sector offer long-term options? Is it the right time to bet on them?
We have been bully for defense for quite some time and continue to do so.
We believe it is a very long-term story as the segment has just begun to emerge in the past few years.
It is not very often that you can get entry into a segment with a long runway just as the sector is beginning to open up and grow.
The key trigger is the opening up of the sector to the private sector. Now, Apart from Local Demand, We Can Cater to the Global Defense Markets, which have far larger potential.
As far as psus are concerned, we do not consider all psus as a monolithic segment.
It Consists of Stocks in Many Different Sector, And We Analyse Each Stock on a Standalone Basis Rather Than Using The Same Broad Brush to Paint All of Them.
What should be our equity investment strategy at this juncture?
Macro Fundamentals, Policy Clarity, And Broadening Sectorral Participation Provide a Solid Backdrop.
While Global Risks Remain, India’s Resilience and Reform-Driven Growth Make It a Compeling Structural Story.
Volativity may continue, but investors with a disciplined asset allocation and long-term percective should stay invested.
We are positive on the domestic sectors compared to the global.
We are overweight on Financials, Industrials and Underweight in Consumer Staples, Utilities, Energy and Consumer Discreationary.
Given Trump’s Tariffs and Global UncertainTies, How do you see Indian Growth-Inflation Dynamics Evolving in the Medium Term?
India has the Least Dependence on Exports as a Percentage of GDP.
While there will be a global impact and India may not remain completely untouched, we belly that we will be able to tide out on the crisis with a good Diplomatic app.
India will continue to remain the fastest-road earge economy in the world.
Inflation is not a concern as our fiscal and monetary policy has been prudent.
Have you noticed a recent trend of Increased Inflows Into Flexi-Cap Funds Over the Past Few Months?
We are seeing flows in both our funds, and even our small-cap fund is close to 1,000 Crore in assets.
Trust Mutual Fund’s Flexi-Cap Fund recently Surpassed 1,000 Crore in Assets Under Management. In the current market, the allocation is in large-cap stocks. What is your strategy moving forward?
We follow a Market-Cap Agnostic Approach and Pick and Choose the Best Stocks Across Across all market-cap buckets.
While the allocation changes from time to time, currently, less than 50 per cent of our portfolio is allocated to large caps.
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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.
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