- Pawan Bharadia, co-founder of Equitree, shares his expert views on the Indian stock market, mid and small-cap space, and the IT sector.
- He believes that the market has factored in many positives and anticipates some profit booking post-election results.
- Bharadia also discusses the impact of potential Fed rate cuts and the future of the Indian IT sector.
Equitree co-founder Pawan Bharadia provides insights on the Indian stock market, discussing mid and small-cap space, IT sector growth, and potential market reactions to Fed rate cuts.
Mid and Small-Cap Space Performance
Bharadia notes that the perceived “froth” in the mid and small-cap space is primarily in larger companies, with the zone between ₹22,000 crore and ₹300 crore market cap still far from frothy. He advises investors to be more granular in identifying high-growth businesses in this space, trading at reasonable valuations to generate alpha returns.
Market Outlook for the Year
The market has factored in many positives, including earnings growth, political stability, and reduced interest rates. Bharadia predicts some profit booking after the election results and a possible healthy correction. He anticipates a larger bull run over the next few years as the ‘Amritkaal’ plays out in the Indian economy.
Impact of Potential Fed Rate Cuts
Despite FIIs selling in the Indian markets for the last three years, Bharadia doesn’t expect significant impact from delays in Fed rate cuts. He believes any sentiment-driven negative reactions will be short-lived and won’t greatly impact the markets.
Indian IT Sector and Private Banks
Q4 results for Indian IT companies have been average, with most large companies giving unencouraging guidance. Bharadia believes growth recovery for these companies could still be distant. However, he finds the Q4 results for most large private banks encouraging and expects them to continue performing well over the next few years.
Bullish Sectors for the Next Six Months
Bharadia remains bullish on sectors like manufacturing, engineering, infra-ancillaries, and select consumer plays. He sees many small and mid-cap companies attracting opportunities and expects multi-year growth and significant wealth creation.
Conclusion
In conclusion, Bharadia provides valuable insights into the Indian stock market, highlighting potential growth areas and advising investors on how to navigate the mid and small-cap space. His analysis offers a comprehensive view of the market’s potential trajectory in the coming year.
