ETMarkets Smart Talk: Mid & smallcaps to do better while Nifty50 could hit 20K by Diwali 2023: Dr Mohit Batra

On the contrary, it is now hovering around the 60K mark. But, given macroeconomic considerations and their impact on India, we foresee the Sensex reaching 67790 and the Nifty50 reaching 20,119 by next Diwali.

Mid and small caps, in our judgement, will outperform large caps. A detailed examination of data from the previous Samvat to the present finds only minor differences in the performance of large, mid, and small caps with small caps outperforming large caps.

We anticipate that small and mid-cap performance will drive the Indian equity market. We have observed a continuous increase in the number of retail investors over the years, and retail investors often park their cash in mid and small-cap stocks.

As a result, we expect mid- and small-cap stocks to do better in the new Samvat year. We also predict that FIIs will resume their robust return.
We feel that the increase in India’s weightage in the MSCI Emerging Market Index may drive fund managers to raise market allocations.

We foresee FIIs returning aggressively due to India’s strong economic resiliency and the market’s potential to produce alpha. In terms of FII inflows, we believe the market is entering an exciting period.

Market sentiments by the following Diwali could be more upbeat, with an 80% chance of exceeding current Sensex levels. By the next Diwali, several factors such as inflation, rising interest rates, and global uncertainty would have abated. This will help boost indices.

Any big factors which the Street must watch out for in Samvat 2079 that could derail bull run?
Rising inflation is the biggest concern on everyone’s mind. Furthermore, the deterioration of China-US ties, concerns about China striking Taiwan, and a variety of other global geopolitical scenarios could weigh on the Street.

Again, even though India has had favourable monsoons for several years, deficient rains in the coming year could have an influence on the market.

Which sectors are likely to remain in limelight in 2079 and why?
We expect IT, capital goods, pharmaceuticals, and the cement will remain in focus. On the other hand, public and private banks, NBFCs, and the auto industry may end up as laggards.

What is your view on the IPO market for Samvat 2079?
The primary market in Samvat 2078 was somewhat restrained due to the subdued secondary market. However, we feel that as time goes on, secondary market sentiments will improve.

It is likely to have an impact on the primary market. As a result, we expect the IPO market to rebound significantly along with an improved secondary market sentiment.

As a result, we believe the number of IPOs and the amount raised in the primary market will be significantly greater in Samvat 2079 than in Samvat 2078.

Rupee seems to head south almost on a daily basis compared to the USD. Where do you see the currency headed in Samvat 2079?
In the preceding Samvat year, the rupee fell 10.6 percent from Rs. 74.9 to Rs. 82.8 per dollar. However, we anticipate that the rupee will rebound from its present levels due to significant FDI and FII inflows that will return to the market.

Amid the falling rupee, where do you see Gold headed in Samvat 2079? Should it be part of one’s portfolio?
When investing in gold, it is critical to consider the precious metal from a strategic standpoint. Gold should always be in the 10/15% of the total portfolio value.

With price movement, the percentage may move up or down and that’s when one should increase or trim one’s gold position. Simply put, if gold prices fall, one’s allocation will fall as percentage of portfolio value and take it as an opportunity to buy more gold.

Likewise, if the price rises, consider reducing gold holding. We believe that gold has stayed undervalued in recent years, and that the precious metal may begin to outperform in the future. And this gives us hope that Samvat 2079 will be a good turning point for gold.

Which are your top picks for Samvat 2079?
Following are our recommendations for Samvat 2079:

1. Schaeffler

2.

3.

4.

5.

What would be your one portfolio advice you would like to share with readers?
If I could only make one suggestion, it would be to prioritise discipline over emotions.

Retail investors are frequently swayed by ‘hot’ stock suggestions or seek unverified guidance to pursue momentum stocks in order to gain quick profits. As a result, they become impatient and unreasonable, causing them to malinvest.

This was especially evident when few retail individual investors exited the market in May and June 2022. However, markets rebounded significantly after June.

As a result, we feel that when it comes to investing, it is not intelligence that determines success and can help create money but discipline.

Your view on earnings – do you see earnings improving in Samvat 2079?
We are confident that the Indian economy would outperform the rest of the world. Inflation will begin to fall, including in India. The interest rate will plummet; from a global viewpoint, the high input costs of crude, metal, or logistics will start to slide.

If this occurs, India Inc’s margins will expand. We anticipate 14% to 15% nominal GDP growth for India. We should expect a similar kind of topline growth for India Inc.

With input cost pressures lessening, India Inc has plenty of room to grow its profit margins. For Samvat 2079, we estimate India Inc to record earnings growth in the teens.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)