What do you think is the most important thing to watch for the market right now, given the somewhat flat earnings season? You never know what to expect from your budget. In that context, is the temporal adjustment expected to last in the short term?
Sachin Shah: Yes, we are in the middle of earnings season as you have clearly outlined. Mr. Trump is expected to come out soon, probably within a week, and what announcements he’s going to make, especially on some of the tariffs and other things, that’s going to be a very important event to follow again. Dew. for.
And of course the budget. So there’s going to be quite a few events and things unfolding over the next couple of weeks, including quarterly results.
Therefore, the market may remain somewhat on the sidelines at this stage. Investors want more clarity and clarity about where they want to invest and which sectors they want to allocate their funds to in stages.
So, from that perspective, yes. At the same time, I would like to believe that the kind of connections we’ve seen across the broader market and quite a few blue-chip companies, stock prices, etc., there are already some opportunities to continue to win.
That’s because some stocks already have very reasonable valuations, which wasn’t the case a quarter ago. This will lead to selective investments, but we will not see a major trend toward increased equity allocation until mid-February.
So what you just said is that the opportunity is not going away. So why not talk about what opportunities you are currently looking at?
Sachin Shah: So some of the private sector banks are probably trading at very reasonable valuations at this point. I would say the banking industry leaders, especially in the private sector, are also very, very encouraged by the types of franchises that they have and the types of deposits that they are mobilizing. And of course, the asset quality over there is still very good. So we can say that some of these private sector banks have had significant time value adjustments to their valuations. So that’s definitely one area where we’re pretty optimistic, given two things: -3-year outlook. How do you value the pharmaceutical sector as it is currently being revalued quite a bit? In fact, apart from real estate, it was one of the best-performing sectors last year. Do you see a bit of a reversal in real estate and pharma, or do you think momentum will continue in both?
Sachin Shah: As far as pharmaceuticals are concerned, there are multiple business segments within it. There are companies that deal with the domestic pharmaceutical field. There are companies that primarily cater to the US generic market. There are companies that are moving into the contract research and manufacturing, or CDMO, space.
Currently, there are companies that specialize in some specialized products for global or developed markets. Therefore, there are two segments.
At least from our perspective, we’re very positive about the cram school and CDMO space. We believe that is the long-term trend for the next three, five, 10 years.
Some of the companies there have already established global credibility.
They are making huge amounts of capital investment. So while capex has been going on for the last 10 years, the kind of acceleration in capex that we’ve seen in the last two to three years, globally, customers are starting to outsource from some companies in India. We’re very serious about increasing that and that’s definitely one area where we’re very optimistic.
There are some companies that have made a breakthrough in specialized businesses in developed markets, where it’s a very profitable market, a very profitable segment, and the barriers to entry are very high. So companies that have already had some success over there are very likely to have even more success over there and become very strong players over the next five, seven, 10 years. I’m optimistic about that.
When it comes to the real estate sector, consumer sentiment regarding demand remains fairly positive. Looking at transaction volumes for most cities, the top seven and top eight cities continue to maintain significant levels. We continue to provide supplies. Therefore, real estate as a whole should be doing reasonably well.
What about the theme of consumption? Because if you look at some of these white goods manufacturers, we’re definitely seeing an improvement in discretionary spending behavior. Other than that, the jewelry department is doing well despite the soaring gold price. I’m sure you have some of these counters in your portfolio as well, so what are your thoughts on these jewelry endeavors? There isn’t a lot of news going around, but do you think there is a sense of security in the jewelery department and there is a long way to grow from this level?
Sachin Shah: Well, at least in the funds and PMS strategies that I personally manage, I don’t own any of these jewelery businesses at the moment. However, some leaders in these businesses have proven over the last two decades that they have a great value proposition compared to the unorganized market. Because in an unorganized market there are clearly organized players. All listed companies are definitely part of an organized market.
Therefore, the transition from unorganized to organized is happening as a long-term trend over the last 10, 15, 20 years as there is a clear value proposition from these organized players to customers and customers. , there’s no reason to believe it won’t continue. Now customers not only accept it, they embrace it.
Therefore, the younger generation is gradually making it clear that when it comes to some of their jewelry and valuables, they want to go and buy from organized players. So I think that trend will continue. There are always winners and losers for each company. So you have to be a little more selective.
