Navy Vijay Ramavat, the Managing Director at Indira Securities, is optimistic about the recent rebound in the market over the past three sessions.
Ramavat believes that the market has factored in various concerns such as inflation, rate hikes, and the Adani Group issue, paving the way for a sustainable recovery.
During an interview with Moneycontrol at the Trader's Mela event held between March 4 and 5, Ramavat shared his opinion that in the near term, the Nifty may test 17,800-18,000 in the next two weeks. He further stated that he believes the market is headed upwards for the slightly longer term, indicating his positive outlook for the market.
The event was organized by Moneycontrol Pro in partnership with Options Bazaar and Pasi Technologies. Trader's Mela is an event management arm of Options Bazaar that enables interaction between professional and prospective traders.
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In terms of stock-picking, he advises investors to seek out small and mid-cap stocks that have held up well during the recent market correction or large-cap stocks that have significantly corrected in recent times.
Ramavat also talked about the valuations for domestic equities, which was a significant factor that prompted foreign institutional investors to shift their allocations to China. He highlighted that valuations have now come down, indicating potential opportunities for investors.
Top sectoral plays
Ramavat is bullish on several sectors including capital goods, railways, PSU banks, and information technology.
He believes that the government's push towards capital expenditure has unlocked growth potential for railways and capital goods sectors, making them a long-term growth story.
As for public-sector banks, Ramavat sees their cheaper prices as compared to large-cap peers, strong credit growth, and the absence of any speculation of capitalisation of the sector as factors supporting his view.
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For the IT space, he believes a strong base formation for the sector is under process. "The worst is over for the IT sector and there is less likelihood of downside hereon making it an opportunity to enter at the current juncture," he said.
Ramavat is more bullish on small and mid-cap constituents like Persistent Systems and KPIT Technologies within the IT space. Despite that, he advises investors to limit their exposure to information technology stocks to 15-20 percent of their overall portfolio.
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