“Despite headwind of global slowdown, I expect Nifty to deliver 11-13 percent earnings growth – significantly better than any other country in the world,” Rajesh Kothari, WealthBasket Curator & Founder of AlfAccurate Advisors says in an interview to Moneycontrol.
During the last 15 months, the market has witnessed time and price correction – implies valuation correction. Hence, he expects the Indian equity market to deliver double digit returns.
As the investment cycle is only getting started, Rajesh Kothari with more than 20 years of expertise in the Indian capital markets thinks that the capital goods sector is a promising one right now.
AlfAccurate also has a positive outlook on the banking industry because of significantly improved asset quality of select banks and the acceleration of non-food credit growth, he says.
Do you see any possibility of CPI as well as core inflation inching up over 7 percent in the coming months?
It is less likely that CPI as well as core inflation will inch up over 7 percent in the coming months.
What are possible challenges for the equity market in the rest of the calendar year? Also, do you see the Nifty/Sensex ending the year with double-digit gains?
The effect of global slowdown will lead to some pressure in the overall corporate earnings growth, particularly for the companies which are linked to USA and Europe markets. However, impact for Indian corporations is likely to be limited as many sectors are getting benefit from China +1 and Europe +1 policy.
Despite these headwinds, I expect Nifty to deliver 11-13 percent earnings growth – significantly better than any other country in the world. During the last 15 months, the market has witnessed time and price correction – implies valuation correction. Hence, I expect the Indian equity market to deliver double digit returns.
Any sector/theme where you have a super bullish view?
We have increased our exposure to Capex linked sectors since the last two years and that continues to do well. As the investment cycle is only getting started, we think that the capital goods sector is a promising one right now. We also have a positive outlook on the banking industry because of significantly improved asset quality of select banks and the acceleration of non-food credit growth.
Which could be a possible laggard sector(s) in the upcoming financial year?
We are underweight on the healthcare sector considering pricing pressure in the generic segment in USA markets.
What is your best stock selection strategy in your investment journey?
Our stock selection is based upon our 3M investment framework – Market size, Market share and Margin of safety. Most of our portfolio companies are undisputed market leaders with best corporate governance and best financials. Our portfolio companies are rightly positioned for the growth and increasing formalisation of the economy.
Also any contrarian bet in terms of sector or stock?
I think our overweight position in capital goods was a contrarian bet in the last year. However, as companies have delivered strong order inflow growth, the street is now getting positive on the sector.
Do you see any recessionary environment on the global front, in the coming quarters?
I think the street is already factoring recession for the world economy for 2023. However, as per recent data, it seems that recession is likely to be milder than what one was expecting earlier – which is good news for equities.
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.
