Swati Khemani of Carnelian Asset Management and Advisors believes investors should look at creating a high-quality portfolio over the next 3 – 6 months as markets consolidate or correct.
"Market can consolidate within the range of 22,000 -25,000 levels. We expect this consolidation to continue for the next couple of months," she said in an interview with Moneycontrol.
The Founder of Carnelian expects sectors such as auto ancillaries, credit players with strong liability franchisees, insurance, IT (ER&D/ SAAS), pharma (CDMO / CRO), to do well. "We also believe chemicals should start doing well towards later part of the year," said the seasoned financial expert with over 21 years of experience in the industry.
Is it the right time to build a portfolio, considering the correction across sectors?
The current market correction has been good and healthy from a medium to long-term perspective. In any bull run, such corrections are desired and welcome as they highlight the relevance of disciplined investing and the strength of one’s investment philosophy. We believe investors should look at creating a high-quality portfolio over the next 3 – 6 months as markets consolidate/correct. One's efforts should focus on finding the right company in the right sector with credible management at reasonable valuations.
Which sectors do you think are worth investing in right now?
We expect sectors such as auto ancillaries, credit players with strong liability franchisees, insurance, IT (ER&D/ SAAS), and pharma (CDMO / CRO) to do well. We also believe chemicals should start doing well towards the latter part of the year. This year is going to be a year of selective stock picking.
Are you concerned about microfinance institutions?
Structurally, we do not like the microfinance business as it has several moving parts that are prone to cycles. The business has shifted in favour of large players (both NBFCs and banks) as raising the liability side is equally important, along with investment in technology. Both these remain in favour of larger players. We typically stay away from microfinance, small finance banks, or smaller banks. We prefer large banks / NBFCs.
Do you think the record-high levels in the markets won't be seen again at least for the next couple of months?
Our view is while the broader markets might give single-digit to mid-teens kind of returns this year, selective, stock-specific opportunities will always be there. The market can consolidate within the range of 22,000 -25,000 levels. We expect this consolidation to continue for the next couple of months.
Are capital market players looking attractive at this moment?
Yes, capital market players do look attractive and will continue to do well over the medium to long term and can grow sizeable from here.
What do you see as the biggest risk for Indian equity markets and India's growth?
There are no major structural risks to the Indian market. Short /tactical risks could emanate in the form of geopolitics, capital flows and asset quality in microfinance, etc. but they are unlikely to derail the Indian story in the long run.
Do you think India will be the least affected by likely tariff hikes from Trump, even if there is a broader impact on global growth?
With President Trump's victory, there will be implications for geopolitics, World Trade and the US economy. We think it is neutral to positive for India considering his relationship with India as seen in the past.
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.
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