Latest news with #ABala
Economic Times
04-07-2025
- Business
- Economic Times
We will have a time correction and a price correction for sure: Sanjay H Parekh
Synopsis Sanjay H Parekh of Sohum Asset Managers suggests Indian markets are not inexpensive, anticipating modest 4-5% returns with potential time and price corrections. His firm favors domestic-focused sectors, underweighting global plays, oil & gas, and FMCG. They are overweight on consumer discretionary, telecom (Bharti), real estate (DLF), and select financials, emphasizing leaders with reasonable valuations. Sanjay H Parekh, Founder & CIO, Sohum Asset Managers, says even if we take next year's earnings, which are consensus for Nifty at 1300 to 1320, India is unlikely to be more than 20 times. Chances of outperformance in the next 12 months is much less. So there is a likelihood of a 4-5% return from here. He is confident there will be a time correction and a price correction. ADVERTISEMENT Are you comfortable with the market valuations and levels? Sanjay H Parekh: Yes, I mean, we are not cheap at all. Earnings have been benign. We had a very weak Q4. We have yet to get the preview for all the sectors. But Q1 also is quite benign as I see initial estimates of some of the sectors are out. But on a bottom-up basis, we see that Q1 will be quite benign, and it could even percolate to Q2. A Bala explains how dialing up risk and taking a leap of faith paid off In the overall economy also, take IIP. Like any of the core industries, the growth rate has been quite tepid. Credit growth is also less than 10%. The household balance sheet is in the mid and the top end. Rate cuts will help revive the economy, but we are yet to see growth. So, this could be a very slow recovery. I do not expect even Q2 to have a better recovery and very possibly because of the rate cuts and the tax benefits, Q3, Q4 onwards we should see recovery in earnings as well. So that is where we are. But even if we take next year earnings, which are consensus for Nifty at 1300 to 1320, I do not think India is more than 20 times I think chances of 20 times outperformance in the next 12 months is much less. Then, we are talking of a 4-5% return from here. So, we will have a time correction and a price correction for sure. You must be betting on some bottom-up stories. Help us understand which themes are looking good to you right now and which themes are reasonably valued at this point in time? Sanjay H Parekh: Stocks are not cheap, I will be very honest. Of course, when we bought them, they were reasonable and hence we do trim also where it is getting overdone. But our whole construction has been around domestic overweight, global underweight. We are almost zero on oil and gas, zero on FMCG which is domestic but their growth is missing. We are underweight on IT and mildly overweight on pharma, We are also overweight on consumer discretionary and on financials, we are mildly underweight on balance, but overall overweight because of our NBFC capital market exposure. In telecom, we are overweight with Bharti. In real estate, we have the largest player DLF. In consumer durables, we have Polycab. And in EMS, we have Syrma. In port, we have Adani Ports. This is where we are in each of the sectors we have bought –leaders or niche. It is largely leaders at reasonable valuation and where we are comfortable with growth. That is how we are positioned and the average price earning of the portfolio is still 15 times on 27, which is at a good discount to Nifty and ours is a largecap dominated portfolio with 72% largecap. (You can now subscribe to our ETMarkets WhatsApp channel) Nikita Papers IPO opens on May 27, price band set at Rs 95-104 per share Nikita Papers IPO opens on May 27, price band set at Rs 95-104 per share Why gold prices could surpass $4,000: JP Morgan's bullish outlook explained Why gold prices could surpass $4,000: JP Morgan's bullish outlook explained Cyient shares fall over 9% after Q4 profit declines, core business underperforms Cyient shares fall over 9% after Q4 profit declines, core business underperforms L&T Technology Services shares slide 7% after Q4 profit dips L&T Technology Services shares slide 7% after Q4 profit dips Trump-Powell standoff puts U.S. Rate policy in crosshairs: Who will blink first? Trump-Powell standoff puts U.S. Rate policy in crosshairs: Who will blink first? SEBI warns of securities market frauds via YouTube, Facebook, X and more SEBI warns of securities market frauds via YouTube, Facebook, X and more API Trading for All: Pi42 CTO Satish Mishra on How Pi42 is Empowering Retail Traders API Trading for All: Pi42 CTO Satish Mishra on How Pi42 is Empowering Retail Traders Security, transparency, and innovation: What sets Pi42 apart in crypto trading Security, transparency, and innovation: What sets Pi42 apart in crypto trading Bitcoin, Ethereum, or Altcoins? How investors are structuring their crypto portfolios, Avinash Shekhar explains Bitcoin, Ethereum, or Altcoins? How investors are structuring their crypto portfolios, Avinash Shekhar explains The rise of Crypto Futures in India: Leverage, tax efficiency, and market maturity, Avinash Shekhar of Pi42 explains NEXT STORY
Economic Times
04-07-2025
- Business
- Economic Times
Moderate expectations on market returns; insurance still a relative bet: A Balasubramanian
Tired of too many ads? Remove Ads Also Read: A Bala explains how dialing up risk and taking a leap of faith paid off Tired of too many ads? Remove Ads MD & CEO,, says insurance is getting the act together and therefore trying to drive the whole mind recall which has to come from buying a policy or making investment in SIP. It will increase the penetrations. Deep commitment is coming and new product offerings are coming from insurance companies, increasing the size of the pie. Therefore, having seen the consolidation, it is a more of a relative bet.: The insurance sector has gone through consolidation and in the last two-three years, these sectors have remained underperformers. At the same time, like the focus that is coming in the case of mutual fund business, the insurance industry was also underpenetrated and increased focus is coming in both from the government and the regulators that every citizen of the country should have one we keep saying that har ghar mein ek SIP hona chahiye (every household should have a SIP), in the mutual fund side, in the same way, insurance is getting the act together and therefore trying to drive the whole mind recall which has to come from buying a policy or making investment in SIP. It will increase the penetrations. Deep commitment is coming and new product offerings are coming from insurance companies, increasing the size of the having seen the consolidation, it is a more of a relative bet. As we keep saying from public sector banks to the private sector; private sector to public sector; from a large-sized NBFC to the mid-sized NBFCs, the same way mutual funds asset management companies in the listed space and insurance companies as an alternative have been coming in. It is a more of a relative value it is in the life insurance business. That is where the deeper penetration is coming. Anyways in the case of health insurance, a limited number of players are remains a sector which we cannot is benchmarking. Banking and finance is a proxy with the economy. If you want to measure the success of the economy, how the banking industry functions will tell you how the economy is doing. So, the banking and financial services industry is a provider of raw material for everyone in the country. Second is they are one driver of growth as we keep saying. As the credit offtake starts picking up, we will probably see the equity market also reflecting in terms of either Sensex – not only because the index weight of the financial industry is pretty large, it is also because of the impact that it creates on the entire since they are a provider of raw material, a provider of money, the interest cost is coming down, and therefore deposit cost is coming down. As they increasingly lend more, the ROE and ROA for the banking industry will be pretty points cannot be ignored and that this is a fact. Is it a trend which is going to be everlasting or is it a trend which is going to change? The step that is being taken to correct this trend is also equally important. When the Reserve Bank of India governor took charge, his single point focus was growth. The moment growth is becoming a high priority, all the steps that are being taken, whether it is a cutting rate or advancing the rate cut well ahead of the market expectations, and then taking care of the ease of doing business when it comes to lending provisioning and infrastructure the whole ecosystem that is now being built to support the growth. The way I see it, the market does not look at the short term, the market always looks one year down the line. As we are in 2025, I think any analyst will start looking at 2026. There are a lot of moving parts. While the macro variable numbers could be true, if you look at the trend in general, for that to change, the steps that are being taken to support the trend to come back, are a lot more the market will start looking at '26 earnings. Maybe one has to, of course, remember the fact that the Indian market has been trading at a high PE multiples because of the high growth expectation that is coming on in India. Therefore, there is a high probability that return expectations versus what actually comes in could be relatively lower. One may expect 16-17% or 20% return. Against that, we may end up getting about a 10-12% kind of return but that is where one has to keep the expectations somewhat moderate.
