BFSI sector poised for long-term gains amid liquidity push: Varun Saboo
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"I do not see a reason why one has to be thinking twice in terms of how markets can rally. I hear a lot of arguments where people talk about Indian markets being expensive, they are expensive and they will remain expensive for the right reason of growth. So, yes, that is my take on an overall market basis," says Varun Saboo , Anand Rathi Shares.I would just like to re-mention my positive stance as I have been coming on your show and every time I have been coming and talking about it. This consolidation if anything is an opportunity which one is getting. We can clearly see in the underlying if you do a proper bottom-up and if you look to own stocks after looking at bottom-up ideas, one could make good money. There is good enough move coming when it comes to stock ideas on a bottom-up basis.I do not see any reason why one has to be negative on the markets currently. If we have to see the industry, heavyweight sector something like an IT pack or say consumer pack or overall consumption, consumption discretionary, BFSI the outlook for all of them remains quite optimistic honestly.So, I do not see a reason why one has to be thinking twice in terms of how markets can rally. I hear a lot of arguments where people talk about Indian markets being expensive, they are expensive and they will remain expensive for the right reason of growth. So, yes, that is my take on an overall market basis.See, honestly, defensives are rallying because there has been some correction in the…, it is basically more of a catchup honestly. I mean, some correction in the valuations is what I meant. But honestly across sectors if I see, there is no reason why we should not be optimistic. When it comes to say infra, capital goods, we have seen a lot of activity pick up in the last six months, nine months versus the lull we had seen before that. So, things moved on that front.Then, we had these series of cuts that we have been seeing rate cuts. We saw a lot of liquidity push from the RBI that gives a lot of positive fillip to BFSI over a longer term. NBFCs benefit in the near term and banks benefit over a period of time. BFSI also has been seeing good enough inflows, flows that we have been seeing, stocks performing quite well, particularly the PSU banks that we saw sharp rally which we saw after the policy. They all rallied more than 10% 15%. There is a catch up pending.Generally, the expectation was that this particular quarter could be weak, but going forward things look very optimistic from a BFSI perspective. So, if anything, there will be opportunity. If there is any opportunity, one should grab it. One should look at accumulating these names out here. Then, there is this entire consumer, consumer discretionary space. Honestly, there has to be a lot of merit to own these names.There has been this Rs 12 lakh tax change which is yet to show. We know about the rate cycle that rates have been on a cut. All these things are extremely pro-consumer. So, I see all these heavyweight sectors doing well. And addition lastly, the IT sector which is more about a play on the US economy.We are seeing some resolutions happening in terms of the trade. We are seeing some optimism around rate cuts there as well. So, from their economy also things should start shaping up well. I am quite optimistic across sectors right now. I do not see any reason to be more skewed towards defensives or more skewed towards growth stocks. All of them should perform and that is where we are extremely positive. Our house call is that index will be at 29,000 soon.
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