Priyanka Tiwari
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Suspense crime, Digital Desk : Shridatta Bhandwaldar of Canara Robeco AMC notes that large-cap stocks have an FY27 earnings forecast of 19 times and are fairly priced at the moment. In contrast, mid- and small-cap stocks are more richly valued at a 10% to 20% premium over historical norms, with valuations between 22 and 25 times FY27 earnings.
Sector Performance Outlook for Next Few Years
Bhandwaldar’s forecast for the performance of the sectors in the next 12 to 24 months is strongest for those driven by domestic demand, including:
Financials
Consumer discretionary
Telecom
Aviation
Domestic pharma
Hospitals
Platform businesses
Select auto and industrial stocks
Sectors for which he has the strongest long-term outlook over the next five years include:
Luxury consumer retail
Capital market services
Renewable energy
Ecosystem of EVs
Transmission & distribution
New-age tech platforms
Investors interest and market conditions
Bhandwaldar believes that foreign investor flows will stabilize after there is greater faith in domestic earnings. He adds that Indian markets are witnessing a slow recovery in foreign institutional investor inflows, which will take off if earnings visibility becomes better.
Multi-Asset Allocation Funds: A Smart Strategy
He clarifies that multi-asset allocation is not a form of managing various assets based on market movements, but a systematic approach to investing. A mix of stocks, bonds, and gold or silver is held in the fund, as these assets are affected differently by different phases of the economy. Such an approach reduces volatility and smooths returns over time.
Allocation Strategy vs. Timing the Market
Some critics of hybrid funds claim it is only a masquerade of market timing. Bhandwaldar has a different view. He states that asset allocation strategies in these funds are managed with thoughtfully driven decisions such as class valuations and economic indicators, which require much data.
Current Global Events and Investment Timing
He recommends not to try timing the market. Instead, one should have a robust asset allocation strategy that is in sync with their financial objectives over a prolonged period. The easing of trade confrontations coupled with heightened corporate earnings sentiment has led to shareholder optimism. There is likely to be increased volatility until such time as global and national expansion reaches a stable phase.
Pharma and Healthcare Sector Outlook
Bhandwaldar observes that new US pricing changes will predominantly have an impact on US Pharma innovators. The domestic Indian pharma sector remains untouched.
He opts for;
Branded generic pharmaceuticals
Pharmaceutical clinics
Certain US non branded relatives
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