Market veterans favour value plays over crowded, expensive themes
Market experts project cautious optimism for Indian equities as valuations become less demanding and earnings growth aligns. Large-cap stocks appear more favorable compared to mid- and small-caps, which require prudence. Preferred sectors include financials, manufacturing, and consumer discretionary, while technology remains divisive. Investors are advised to avoid slow-growth sectors and…
Indian equities have faced two challenging years, but market veterans believe valuations have softened enough to offer reasonable returns. Large-cap stocks are currently more favorable, while mid- and small-cap stocks carry a more cautious outlook. Financials, manufacturing, and consumption sectors are seen as attractive themes, whereas technology views are divided.
Key risks include rising crude prices, higher developed market bond yields, El Niño, and increased equity issuance. Despite these challenges, the market outlook for India is positive, with expectations of low-teens returns. Investment strategies include a barbell approach, combining quality stocks with strong earnings upgrades and sector leaders that have corrected in recent years and are now in the value zone.
Themes that are looking attractive include banking, consumer discretionary, healthcare, and manufacturing. Investors are advised to avoid slow-growth or disrupt-prone sectors like consumer staples and IT, as well as narrative-driven, highly-valued sectors such as capital goods.
Written by urgent.news from The Economic Times - Top News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
