“Markets will be looking forward to the next quarter, the third quarter earnings, where the spillover effect will be visible after six quarters of slowdown,” he added.
Murarka noted that while the index has remained steady over the past four quarters, most of the market activity has been concentrated in specific stocks.He observed that some segments of the market show signs of froth, suggesting that investors should exercise caution and adopt a more medium-term perspective when making investment decisions.
Read Here | Manulife Investments neutral on Indian equities for lack of short-term triggersAfter this prolonged slowdown, he believes a healthy consumption recovery is imminent over the next four to six quarters. Morarka attributed this expected revival to a significant government stimulus, combining tax cuts, interest rate cuts by the Reserve Bank of India, and goods and services tax (GST) adjustments, which he estimates totals around 1% of the gross domestic product.
He advised that investors should be positioned in consumer-focused stocks, including staples and discretionary, to benefit from this trend. He also highlighted the auto sector, noting that anaemic volume growth over the last five to six years suggests significant pent-up demand which the stimulus could unlock.
When asked about investment ideas beyond large-cap names, Murarka pointed to opportunities in discretionary consumption and high-growth internet sectors. He cited Jubilant FoodWorks, a leader in India’s organised pizza market, as a key play in discretionary consumption.
He also highlighted food delivery companies such as Swiggy and digital payments platforms like Paytm, noting that they could sustain high growth rates for the next five to seven years. “Even while the starting point of buying is not so attractive, the next growth over the next four or five years will compensate,” he said.
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