Trust MF CIO says new Samvat begins without euphoria, bets on banking, infra, and consumption

Mihir Vora, CIO of Trust Mutual Fund, which manages assets worth around ₹3,794 crore, said the market setup at the start of the new Samvat year is the opposite of what it was last year. “Last year, there was huge optimism and the markets had done so well,” he said. “Now, everybody is complaining that markets have not done much for the last 12 months. It’s a good place to start psychologically because there is no euphoria at this point.”According to Vora, the macroeconomic backdrop has also reversed. “Last year we had more of inflation concerns in India. Now it is the other way around. There are potential inflation concerns brewing in the West, but India is in a good spot,” he said, adding that there is now “ample scope for cutting rates.”

He said the government and the RBI appear to be in “whatever-it-takes mode” to support the economy through budget allocations and goods and services tax (GST) cuts. “The proof of the pudding is that these cuts worked, and initial feedback from the Diwali season seems to be good,” Vora noted.

Also Read | UBS expects modest market returns, bets on consumption and defence themesVora expects a strong December quarter driven by festive demand. “Consumption spending for the busy season looks up 20-25% year-on-year (YoY). So, the December quarter will be good,” he said. Auto, durable, and discretionary stocks have already seen strong gains, but sustaining this momentum will depend on how trade and consumption trends evolve.

Trust Mutual Fund has increased its exposure to consumption, Vora said, but the next question is how much more to add in banking and related sectors. “Banking is one of the most ignored sectors for the last couple of years,” he said. “If the momentum continues, there’s no way the economy can grow at 7-8% without banking growing at least 12-14%.”

He pointed out that while much of the recent financial market performance has come from capital market stocks and non-banking financial companies (NBFCs), banking has greater weight in the indices. “If banking performs, that will be the engine to drive the markets for the next leg,” Vora said.Also Read | Alchemy Capital CIO says auto cycle turning, IT bottoming out

On investment themes, he emphasised the need for stronger physical investments. “Structurally, we cannot grow at 7% plus without physical investments. The push on infra and private sector CapEx has to come back,” he said.

Vora also discussed consumer sectors, saying Trust Mutual Fund remains selective. “We focus more on the non-staples part because most staple categories have become saturated,” he explained. “We’re looking at incremental data points in two-wheelers and passenger vehicles.”

He believes rural demand is improving, particularly after a favorable monsoon. “Earlier, we were more towards the urban side, but now we are graduating to the more rural plays also,” he said.

For the full interview, watch the accompanying video

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