For 2025, capital markets, wealth management, home finance, and SME lending are compelling contra plays, said Robin Arya, the smallcase Manager and Founder & CEO at GoalFi, in an interview to Moneycontrol.
According to him, these sectors are poised for strong growth, backed by structural trends and increasing financial penetration.
Furthermore, he believes the insurance sector also remains a strong growth story for 2025. "Rising penetration, particularly in tier-2 and tier-3 cities, is driving demand for health and life insurance. Post-pandemic awareness and government initiatives like Ayushman Bharat are further boosting growth," said Robin with over 15 years of experience in the financial services and technology industry.
Which sectors are on your radar as contra plays?
For 2025, capital markets, wealth management, home finance, and SME lending are compelling contra plays.
>> Capital Markets: Retail participation is accelerating through SIPs and ETFs, with tier-2 and tier-3 cities driving untapped growth.
>> Wealth Management: With rising demand for advisory-led portfolios among UHNIs and retail investors, wealth platforms focusing on digital adoption and diversification are set to thrive.
>> Home Finance: Urbanization and government incentives for affordable housing are driving sustained demand for home loans. Housing finance companies targeting first-time buyers and mid-income groups are well-positioned to benefit.
>> SME Lending: NBFCs focusing on tech-driven credit disbursement are playing a pivotal role in financial inclusion. The growing credit demand from small and medium enterprises, coupled with government support for MSMEs, creates a promising growth story in this space.
These sectors are poised for strong growth, backed by structural trends and increasing financial penetration.
Is IT a great buy for 2025?
The Indian IT sector could stage a strong comeback in 2025. While global macro challenges weighed on performance in 2024, the worst seems to be over. Indian IT players are well-positioned to benefit from a revival in global tech spending, with growth areas like AI, cloud, and cybersecurity gaining traction.
Investors should look for IT companies with diversified revenue streams, strong deal pipelines, and exposure to high-growth industries. While global risks persist, valuations have become more attractive, making IT a compelling buy for long-term investors.
Are you bullish on the insurance sector?
Yes, the insurance sector remains a strong growth story for 2025. Rising penetration, particularly in tier-2 and tier-3 cities, is driving demand for health and life insurance. Post-pandemic awareness and government initiatives like Ayushman Bharat are further boosting growth.
Insurance companies are also leveraging technology to streamline distribution and enhance customer experience, making products more accessible With strong distribution networks and tech adoption, the sector is well-positioned for sustainable growth.
Do you see more challenges for the equity market in the coming calendar year? Does this mean a return of more than 10% is unlikely?
While the broader equity market may face challenges in 2025 due to global uncertainties, elevated interest rates, and fiscal pressures, there are pockets of value and sectoral shifts that present significant opportunities.
Sectors like wealth management, capital markets, and healthcare are well-positioned to outperform. Rather than focusing solely on broad indices, investors should prioritize these high-growth sectors and quality companies to capture meaningful upside in 2025.
What should the strategy be for 2025?
The strategy for 2025 should center around sectoral opportunities, value investing, and diversification. Focus on sectors with strong structural growth, such as wealth management, capital markets, and healthcare. Additionally, SME lending and home finance are emerging opportunities, driven by tech-led credit disbursement and government incentives for affordable housing.
To mitigate risks, investors should balance equity exposure with gold and debt while leveraging SIPs for steady investments. Tactical allocation to undervalued segments like mid-cap IT or specialty chemicals can add alpha. A selective, disciplined approach will outperform broader indices in 2025.
Do you think FMCG is not a buy right now?
FMCG may not be an immediate buy due to elevated valuations and muted urban consumption demand. The sector has seen significant re-rating as a defensive play, but with weak volume growth, it is unlikely to outperform broader markets in 2025.
However, select FMCG names with strong rural penetration and essential product portfolios could benefit from an eventual recovery in rural consumption, aided by government initiatives and a better harvest cycle.
What do you expect from the US Federal Reserve this week?
The Federal Reserve is widely expected to cut interest rates by 25 basis points during its meeting on December 17-18, 2024, bringing the federal funds rate to a target range of 4.25%–4.5%.
A dovish stance, could bolster market sentiment, benefiting sectors such as banking and NBFCs. Conversely, any indication of continued concerns over inflation may introduce caution among investors, particularly affecting rate-sensitive sectors.
In summary, while a 25-basis point rate cut is anticipated, the Fed's guidance on future monetary policy will be pivotal in influencing market dynamics as we approach the new year.
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.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
