Daily Voice | What makes this analyst hopeful about Nifty above 20,000 by year-end?
According to Divam Sharma, Founder of Green Portfolio PMS, clocking a 7 percent growth in FY24 will not be a surprise as GDP numbers beating analyst expectations.
“We are also seeing robust trends from PMI, IIP, inflation, and GST collection,” Sharma told Moneycontrol.
Sharma, with over 15 years of experience in managing investments in the stock market, sees Nifty 50 closing the calendar year above 20,000 as there are a lot of factors in support. The trend of FPI flows reversing and the cash allocation that could come from mutual funds will push valuations further up, he believes.
Do you think the falling crude oil is the only big positive for India? Will India surprise Street with around 7 percent growth for FY24?
Brent crude below $80 a barrel has been a blessing for India. India has a high reliance on crude imports and these levels have been positive in times when macro headwinds were visible in developed economies.
We have seen GDP numbers beating analyst expectations. We are also seeing robust trends coming out of PMI, IIP, inflation, and GST collection. We will not be surprised if we clock a 7 percent growth in FY24.
Do you see the market closing the calendar year above 20,000 on the Nifty50?
Yes, there are lots of factors supporting this. The trend of FPI flows reversing and the cash allocation that could come from mutual funds will push valuations further up. From a Nifty perspective, financials are looking intense from here, which is a big contributor.
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Considering the headwinds that many businesses faced in FY23, we are looking at a strong FY24.
Do you see a similar kind of earnings growth in FY24 compared to FY23?
We should see margin and volume growth in FY24. We are seeing a positive outlook coming from promoters. ‘China plus one’ as a theme is playing out very well and we are seeing a rise in export numbers.
Are you super bullish on the FMCG space? Which can be a dark horse?
We are neutral on FMCG. We believe that we are yet to see the rural economy pick up and that the stickiness of inflation shall impact consumption.
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We believe that the IT sector could be a dark horse in the second half of this financial year. The large IT companies have come down to attractive valuations while we believe the sector should see a turnaround in terms of order book outlook in the second half. We believe that the sector should initially benefit from investments in AI (artificial intelligence).
Do you still see more opportunities in small-caps than in midcaps?
Small and mid-caps have seen a wonderful run since April. We still see many opportunities with attractive valuations in the space where we could see a catchup. Investors should look for opportunities in quality microcaps having niche businesses and good corporate governance.
We also see the multiples expanding as interest rates start falling by Q4.
Are the Federal Reserve and RBI done with the rate hike cycle now?
It’s a wait-and-watch for the US Fed for now. If you look at the probability of further hikes, we are looking at at least one hike by December.
As for the RBI, we believe that we are done with the hike cycle.
The inflation numbers have been encouraging and we believe that we should see more pedal on the economic growth before the general elections next year.
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