Market expert Mark Mobius of Mobius Capital Partners has a bullish outlook on India even as foreign institutional investors continue to shift allocations from expensive Indian equities to cheaper North-Asian markets like China, South Korea, and Taiwan.
For Mobius, the outflows from India to other cheaper markets is a very short-term phenomenon. He feels the Indian equity market is going to outperform in the long term.
"Growth rate in India is superior to most countries around the world and it can also be sustained in the long run on the back of the positive impact from the shift from China to India in terms of software and production, supported by the massive technology change," Mobius said in an interview to Moneycontrol.
Mobius also believes that the chances of making more money in India as compared to other equity markets are rather high as expectations of the country's future growth trajectory remain strong.
When asked about the top sectors that he would bet on, Mobius chose software, healthcare, and infrastructure as his top sectoral picks.
He also sees a potential for strong returns in companies that supply components like pipes and turbines to infrastructure companies.
Watch: Mark Mobius Exclusive | Why Mobius Is Bullish On India | India View, Adani Rout & More
Despite a divided sentiment on the Street with regard to software companies, primarily due to concerns of an impending recession in the US and Europe curbing IT spending, Mobius believes the sector has strong growth potential.
"The good thing about technology is that in times of trouble, more technological support is needed. Hence, in the face of uncertainties, companies need to raise their technology game which boosts demand for software in such times," Mobius said.
He also made a point to highlight a silver lining in the selection of technology stocks. "There are many technology companies that are based on great ideas but not making any profits, those should be avoided," he said.
Another pick from Mobius' top sectoral themes was healthcare. "Medical testing stocks are likely to do well as interest in good health is increasing in India. Along with that, the ability to pay for good medical care is also on the rise as per capita income increases," Mobius said.
On new-age technology stocks, Mobius was of the view that even though some of these companies have woken up to focus on their earnings, investors should still wait until they start producing positive results.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
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