Arvind Kothari, the small case manager and founder of Niveshaay, stated they have a highly optimistic outlook for manufacturing in India, and the main reason behind this the government is also highly focusing on this sector. Thus they are looking forward to some amazing initiatives and strongly support manufacturers on a domestic level.
He also added that a wide range of sectors like recycling, electronic manufacturing and renewable energy are holding promising potential in becoming the wealth creators of the decade. When asked about the recovering smartly of business and down in single digits from the highs of all time, he stated that surely last year was a challenging time for equity market investors.
As there were no yielded returns from the index. But still, some parts of the market have performed exceptionally well despite all of the difficulties but still have made some exceptional earnings and also had great growth all at the same time. A few sectors mainly led this much-needed recovery in the market.
The industrials, banking and financial and capital goods were some of the sectors which emerged as most profitable and gainers in the past year. On the other hand, telecom, oil and gas, and IT were among the sectors that have been experiencing significant losses, placing them in sectors with major losses.
Thus we are expecting the continuation of the same pattern in the future. Sectors with strong earnings, huge growth and visibility are most likely to perform well in the future. Thus we are highly focusing on companies generating a cash flow with healthy balance sheets and reasonable valuations.
They also ensure a thorough understanding of all products, business models, and end-user industries. They also conduct extensive ground research, which includes management discussions and plant visits, among the other various sources of information.
Downturns and Corrections are inherent to the equity market, and in the year 2023, they will present us with these occurrences. However, if one can maintain a long-term perspective, these will be viewed as opportunities for investment based on the economic fundamentals. Any downward movement will allow you to buy if you hold a long-term view.
The important challenge lies in identifying sectors which are relatively undervalued and also offer visibility of high earnings. The second half of 2022 witnessed a buying of Rs 0.96 lakhs by foreign portfolio investors (FPIs). This largely helped reduce the overall net selling of Rs 1.21 lakh crores by FPI in 2022.
Global investors are becoming less optimistic about business with the United States due to the high level of debts, rate hike cycle, less consumption of data and less encouraging employment.
On the other hand, China is gradually opening up as the country’s growth remains in the low single digits. As this scenario occurs, all emerging markets are getting more favourable. And among these markets, the anemone of India has shown a stable performance. It is also being positioned better than most countries’ economies while facing certain uncertainties on a global level.