During a recent interview with CNBC-TV18, Samir Arora, the founder of Helios Capital, offered his insights on various aspects including the forthcoming budget, FIIs trimming stake in valuations within the Indian market, and trends in the paint stocks segment.
Here are three key takeaways from Arora's interview:
1. Bullish on budget: Arora said that the forthcoming Union Budget will be the major focus going forward considering that Prime Minister Narendra Modi promised a transformational budget, if chosen to be the PM for third time.
"The big picture sense is of being bullish on the budget," Arora said while underscoring the necessity for markets to broaden their focus beyond the actions of foreign institutional investors (FIIs) and mutual funds.
Arora pointed out that the government had previously indicated their target of reducing the fiscal deficit. A transformational budget could mean that the government might invest in new areas, and the government's target of reducing fiscal deficit could be done by aggressively selling state-owned companies, he said.
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2. Valuations: Samir Arora challenged the notion of capital flowing from India to China, citing robust foreign portfolio investment (FPI) inflows in March. Regarding valuations, he noted a balanced perspective, stating, "Today, the valuations are not attractive enough for us to say that it is the best time to invest, but neither are the valuations too bad to start investing. It is a normal market." The Indian market is compounding at 13-15 percent, which is in line with earnings growth, he said.
3. Paint stocks: Arora is of the view that paint stocks are unlikely to outperform in the foreseeable future. He has maintained short positions on paint companies in offshore funds over the past year.
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