Jimeet Modi of SAMCO Ventures
“We are extremely bullish on the consumption space, because most of the inflation and margin pressures are behind us,” Jimeet Modi, Founder & CEO, Samco Ventures, said in an interview to Moneycontrol. He also finds the technology space attractive, where Modi believes that nearly all the bad news has been factored into the price.
Overall too, he expects a fairly strong bull market for the next few quarters, considering that most of the bad news has already been factored in the price over the past year or so.
Modi, who has over 12 years of experience in capital markets, said that the earnings trajectory is solid and very little downside risk is seen, at least over next 12-18 months.
Do you expect a big bull run if the market reclaims and sustains above the recent record high levels?
We expect a fairly strong bull market for the next few quarters, considering the fact that most of the bad news has already been factored in the price over the past year or so. These include a hawkish US Federal Reserve (the Fed), rising interest rates, declining foreign exchange reserves, food price inflation, the Russia-Ukraine war, and more.
Most of the headwinds are behind us. We now expect things to get better and the tailwinds for the markets to continue.
Also read: Sensex scales record high | How to make the most of your investments
Do you think the Fed will turn less aggressive as officials are pointing towards growth concerns?
For the past many months the pace of rate hikes by the Fed has been 75 basis points (bps) and we anticipate the same going forward. Subsequently, they will slow down dramatically. Sometime towards the middle of next calendar year we expect the Fed to completely pause or reverse the rate hikes.
There is ample evidence in support of this argument. The prices of several commodities have collapsed globally. Shipping rates have dropped considerably, natural gas prices have also cooled off. So there has been cooling of inflation, which leads us to believe that the Fed will turn dovish over a period of time.
Your thoughts on capping the price of Russian oil? Do you expect oil prices to come down to $ 70 a barrel?
If you look at US oil prices, they have already fallen below $ 80 per barrel from the recent high of $ 125 per barrel. So, whether it is $ 70 or $ 80, it is quite immaterial.
Also read: Sensex simmers with 26 stocks trading above their 200-day moving average
The general trajectory of oil prices seem to be either consolidating side-ways or may even decline a little from the current level. We don’t expect any break-away rally in oil prices anymore.
Which sectors will participate in the next northward journey of the equity markets?
We are bullish on private sector lenders — especially, financial services businesses which operate in the area of financialisation of savings.
We are also extremely bullish on the consumption space, because most of the inflation and margin pressure is behind us. The technology space also looks attractive, where we believe that almost all the bad news has been factored into the price.
Do you think the earnings fundamentals for FY24 look very solid?
We are of the view that we are looking at a good earnings upcycle, barring certain pockets. We think that the earnings trajectory is solid and very little down side risk is seen, at least over the next 12-18 months.
What are your preferred bets in the IT space that are less susceptible to a slow-down?
We are generally bullish about IT services as a whole. Within the space, we prefer larger and mid-cap IT stocks over small-caps. The larger and mid-cap IT stocks are much stronger in managing the supply side, which is talent management, which is a big issue at this moment.
At the same time, we are bullish on niche IT players which are specialists in the ER&D (engineering and R&D) space. These are the sub-segments in the IT space that we are bullish on.
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.
