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Navigating the Indian Markets in 2024: A Practical Approach to Investing

MARKETS OUTLOOK 2024 - Where to Invest Now?

The Future of Indian Markets: Where to Find Growth and Value in 2024

The markets are at an all-time high, mid and small-cap stocks have run up over the last 3 years. Is it expensive? Should I enter now? Must be the questions coming into your mind. Also, it is an election year, things could go either way. Let us examine the facts

  1. The forward pe is close to the historical average of 20 which means that while markets have gone up there is no irrational exuberance. There may be small corrections however a big dip is not in the offing now unless a true-blue global crisis happens.
  2. For a crisis to happen globally liquidity must be at its peak implying that funds coming from rate cuts would need to be deployed. As of now, we are in a situation where interest rates are at a peak, and rate cuts have not yet begun. It will take a couple of quarters of rate cuts for us to have that kind of liquidity which implies excessive risk-taking behaviour at an operating level. 
  3. Balance sheets both at the level of government and at a Corporate level are strong. This implies a higher risk-taking appetite at a Company level as due to government spending risks have been reduced to a certain level. Also, when interest rates fall Corporates tend to borrow and increase assets. Going forward the interest rates are likely to fall and Indian Corporates are likely to benefit from the same. 
  4. The government has focused on infrastructure which creates a multiplier effect. Traditionally cement and other sectors have benefited from the proactive approach of the government towards infrastructure building. Similarly, this time is no different. This implies the creation of a superstructure along with digital enablement which would help maximize business opportunities. The power sector has also gained as digitalization requires power as a driving force.

Where do we invest?

It is important to look at opportunities that are based on facts and the competitive advantage of the country. IT SERVICES has been a strength for the country and has been fetching dollars. It is a good opportunity as the US Economy improves.

Infrastructure-allied segments are likely to do well. However, it depends on government policy and hence is cyclical in nature.

A mix of growth and value is likely to deliver the goods at a portfolio level. Value picking at a small/microcap level is likely to do well. As far as the million-dollar question goes which govt will come in power? Our response is regardless of the government in power the work done by the existing government over the last ten years is sufficient to take care of earnings growth over the next 5 years. Beyond that would be difficult to predict.

Take calculated risks! Seize the day!

By Anirudha Gupta

An Investment strategist with 19 + years of experience in Managing Key Portfolios. Currently leading Ashiana Financial Services as Chief Executive Officer. An author and a Certified Corporate Director with a strong grasp of business issues. Way back, was also recognized as the Top ten Personal finance consultancy in India by Quora as per a survey done by Creditvidya for the year 2017-18. 

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