Vijay Singhania of TradeSmart
The only thing that can push the market to a level of 70,000 (on the BSE Sensex) is foreign investors flow or an end of the Russia-Ukraine war, believes Vijay Singhania of TradeSmart.
However, uncertainties abound, especially with the coming winter and stoppage of gas flow to Europe, the growth uncertainty in China with its banking system witnessing an unprecedented crisis is adding to the market anxiety, the TradeSmart chairman shares in an interview to Moneycontrol.
The chartered accountant with an insight of over 30 years in the industry believes that given the strong growth rate in India but uncertainty globally, the consumption, especially domestic consumption, continues to be a safe play. Most companies in this sector have low levels of debt and decent cash flow which can help survive the uncertainty, he says.
Excerpts from the interaction:
Do you see India at an opportune spot in case there’s a recession in the US or in Europe?
A slowdown in the US or in Europe and, more importantly in China, leaves some avenues in the Indian market to be invested in. Domestic plays like consumption, realty, oil and gas, hospitality, hotels are likely to do well.
Initial data shows that the slowdown is not affecting the IT space, so that sector can also be on the radar.
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If you have a strong feeling that the India is on a path to a robust journey, then can you point out sectors that one can start investing in and why?
India is among the strongest economies in the world and is likely to remain so in the near and medium-term future.
Among the sectors that we feel that will guide India to a strong future are infrastructure and related sectors, chemicals, IT, textiles, pharmaceuticals and defence.
IT space has a strong revenue growth forecast due to its healthy order book, but still the big underperformer this year. Is it the right time to grab the opportunity of buying IT stocks now or should one wait for some more time?
With a slowdown in the US and Europe and an increase in hiring costs, there is a fear in the market that the sector may see topline growth but may get affected on margins. However, the change in product mix and an increase in digitisation are likely to have a structural impact on IT companies going forward.
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Further, there are no signs of a slowdown in the IT space. Commentaries of global IT companies and forecasts by industry associations show the sector is in for robust growth in the foreseeable future.
Can you name the ‘one sector’ that has to have in everyone’s portfolio despite whatever be the market trend, and why?
Given the strong growth rate in India but uncertainty globally, we feel consumption, especially domestic consumption is a safe play. Most companies in this sector have low levels of debt and decent cash flow which can help survive the uncertainty.
Do you think the market is set to make a record high by September and will reach 70,000 mark next year on the Sensex?
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The market has strong momentum behind it with foreign investors visiting the country ahead. If the trend and fund flows continue we can see a retest of the previous high. However, uncertainties abound, especially with the coming winter and stoppage of gas flow to Europe, plus growth uncertainty in China with its banking system witnessing an unprecedented crisis is adding to the market anxiety.
The only thing that can push the market to a level of 70,000 is foreign investors flow or an end of the Russia Ukraine war.
Do you think the coming festival season is much better for consumption stocks than previous years?
The recent data published by the Retail Association of India shows that we are on the right track regarding consumption. An 18 percent YoY growth at a time when global retailers are struggling to keep their head above water shows the strength of Indian consumption.
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