During a recent interview with Moneycontrol, Ashwini Shami, who serves as the Executive Vice President, Portfolio Manager, and co-founder of OmniScience Capital, provided illuminating perspectives on the sectors expected to exert significant influence on market performance over the coming near to mid-term horizon.
Financial Services
According to Shami, the financial services and IT sectors are expected to witness robust earnings expansion, exerting significant influence on market dynamics. These sectors collectively represent nearly 50 percent of the index weight (Nifty 50), making their performance crucial for overall market sentiment and trajectory.
Investment Opportunities
During a downturn in the tobacco industry, Shami underscores the advantageous valuation of ITC within the expansive FMCG sector. He regards ITC as a compelling dividend-yielding stock, accentuating its diversified portfolio encompassing core businesses. Moreover, he highlights the robust predictability of cash flows associated with the company, further bolstering its attractiveness as an investment option.
Economic Catalysts
With over two decades of experience in the financial services industry, Shami foresees economic activities surrounding Ayodhya, particularly post the Ram Mandir consecration ceremony, as a catalyst for strong growth in the Uttar Pradesh (UP) economy. UP witnessed a remarkable growth of nearly 20 percent last year, surpassing the national GDP growth rate.
Market Outlook
Addressing the prevailing liquidity-fueled momentum dominating the market landscape, Shami emphasizes the critical role of present valuations in delineating forthcoming market trajectories. Notably, the Nifty 50 index’s existing price-to-earnings ratio stands at 22.8, while the forward multiple exhibits a decline, dropping below 20 when normalized earnings are taken into account.
Value Proposition
Shami is notably optimistic about the prospects of Public Sector Undertaking (PSU) stocks, underlining the government’s dedicated focus on growth-oriented investments. This commitment is exemplified by the substantial budget allocation exceeding Rs 15 lakh crore earmarked for capital investments.
Notably, sectors such as defense, power, railways, and urban development stand at the forefront of this surge, poised for sustained expansion. The burgeoning order books within these sectors serve as robust indicators of the abundant market opportunities set to unfold.
Decision
As investors navigate the dynamic landscape of the market, insights from seasoned portfolio managers like Ashwini Shami provide valuable perspectives on key sectors and investment opportunities. With a keen focus on sectors driving earnings expansion and government-led growth initiatives, investors can make informed decisions to capitalize on market trends and maximize returns.
