Sushant Bhansali is the CEO at Ambit Asset Management.
Ambit Asset Management expects 2023 to be a strong year for Indian equities as private sector capex picks up, strong earnings momentum continues, with the time correction valuations becoming relatively more inexpensive and demand conditions remaining strong, Sushant Bhansali says in an interview to Moneycontrol.
Markets are always forward looking and tend to factor in events before they actually play out. Hence, the CEO at Ambit Asset Management, backed by his more than 19 years of experience and being a chartered accountant, believes that IT sector valuations are now attractive and more importantly margin pressures are now behind.
Hence, long-term investors should definitely start looking at the sector favourably now, he advised. Excerpts from the interview:
As 2022 so far is a tough year for the equity markets, do you think 2023 is also going to be similar one or expect a strong year?
We would expect 2023 to be a strong year for Indian equities as the private sector capex picks up, strong earnings momentum continues, with the time correction valuations becoming relatively more inexpensive and demand conditions remaining strong.
What adds sheen to the bullishness is that amongst the entire global mayhem, India continues to stand tall and will outshine the entire world, including US, European Union and China. We do believe that a strong bounce back is in the offing in 2023.
Also read – Why are FIIs selling heavily? Market masters answer
Is India really looking strong among emerging markets as well as developed world? What are the factors that back your view?
First and foremost, Inflation in India continues to remain well within control. What also helps is the fact that RBI has been fairly proactive in tackling the issue. This essentially means that the tightening cycle in India will not be a prolonged one and will lead to minimal demand destruction.
Further, domestic demand continues to remain fairly strong and steady, which helps the economy to grow at a certain minimum pace even as the developed countries go into a slowdown. Third is the government push to the manufacturing sector in a bid to make India more self-reliant and reduce import dependency. A combination of all the three factors make India stand out.
Would you suggest investors to wait for December quarter earnings and commentaries before taking positions in the IT space?
Markets are always forward looking and tend to factor in events before they actually play out. We do believe that IT sector valuations are now attractive and more importantly margin pressures are now behind us.
Also read – Those still investing in China are suffering from Stockholm Syndrome, says Helios Capital founder Samir Arora
There could be some demand pressure but that is already built into the price. Hence, long term investors should definitely start looking at the sector favourably now.
What’s your take on the telecom space now, given the expected benefit of ARPU at operating level?
While we do not own telecom stocks in our portfolio, we do believe that the space is in a much better place now and things do look settled. From that perspective, it can be an attractive investment opportunity.
Do you think the RBI will take a pause after one more interest rate hike in December policy meeting? Any possibility of cut down in full year growth forecast?
We do not think that there would be a pause post December as the Fed continues to tighten and the only tool RBI has at their disposal to defend the INR is interest rates, some marginal further tightening can’t be ruled out.
Also read – The era of unidirectional bets is over, says Enam Holdings’ Manish Chokhani
However, we do not anticipate any meaningful reduction in growth expectations.
What are the best attractive sectors to bet on this Diwali which can generate multibagger returns by next couple of Diwali?
We believe banks offer a lot of value to these levels, Auto sector is coming out of a slowdown after a long time and domestic consumption continues to look strong. IT can be a dark horse with a 2-3 year view.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
