In an interview with Moneycontrol, Sushant Bhansali, CEO of Ambit Asset Management, emphasizes the importance of monitoring the monsoon, inflationary patterns, and interest rates as significant risks in the upcoming months.
He believes that rural markets are poised to revive going forward, and rural-oriented businesses will benefit from this.
Financialisation of assets and its increasing flow into the managed investments industry in recent years has been backed by buoyant debt and equity markets on the back of liquidity, says Sushant with over 19 years of experience in asset management.
Q: Is the market looking expensive now? Do you expect any kind of risk that can derail the rally in the coming months?
The Nifty has rallied smartly over the past 3 months, however, still remains below long-term averages of 20x. Low corporate leverage coupled with improved return ratios, strong earnings growth, and robust economic growth has led to FII flocking back to India. Monsoon, inflationary trends and interest rates are key risks to monitor in the coming months.
Q: What are the key things to look for in the June quarter earnings season?
Various high-frequency indicators along with various RBI surveys point to healthy demand traction in Q1 (RBI estimates a Q1FY24 real GDP growth of 8 percent YoY), which along with lower commodity prices (LME metal index down 17 percent YoY and Brent crude oil down by 30 percent YoY) is likely to result in mid-teen corporate earnings led by margin expansion.
Q: Is it the time to bet on rural economy-related themes?
Monsoon progression is encouraging after a weak start which bodes well for agriculture & rural economy. Real wage inflation also turned positive recently after nearly 3 years.
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We believe rural markets are poised to revive going forward, and rural-oriented businesses will benefit from this.
Q: Your take on financialisation of savings as a theme?
Financialisation of assets and its increasing flow into the managed investments industry in recent years has been backed by buoyant debt and equity markets on the back of liquidity. The behaviour change was partly boosted by Covid, with more people entering the stock market and focusing on insurance.
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Regulatory bodies, too, have played an impactful role in developing the financial ecosystem & making it more transparent. The shift from needs to wants alongside massive regulatory developments have acted as a catalyst in the growth of financial assets.
Q: Are we still in the midst of a global tightening policy?
Most commodity prices have fallen led by supply chain normalising and softening economic outlook. With the first signs of dents in economic growth now visible, and fallout from financial-market tensions lingering, any pause by the Federal Reserve after at least one more increase could cement a turn in what has been the most aggressive global tightening cycle seen in decades.
Q: Where do you want to put your money - general insurance or life insurance space?
Though the long-term potential of the sector is promising, it needs to be assessed in a scenario of receding tax incentives. Significant adoption of insurance in the absence of incentives will get elongated & thereby growth could recede for the sector.
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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