00:00Is December the right month to invest in the stock market?
00:04If you are a homemaker or a student, what kind of investment will be right for you?
00:09And in the coming year, what kind of changes can we expect from the stock market?
00:14Hello and welcome, my name is Shruti Sarkar and you are watching GoodReturns.
00:18And today we have with us Sneha Koddar, VP Research, Motilal Oswal. Welcome Sneha.
00:26A very good morning.
00:36My first question to you is that, you know, a new year is about to come.
00:41And this year we have seen a lot of ups and downs in Nifty and Sensex.
00:45And it's been very volatile in the past few weeks, if I could say.
00:50What is your forecast for the new year?
00:53Hi, so Shruti, basically, this year has been really good, as you said.
00:59In fact, we have seen stellar returns.
01:02But then, where the market has made a new high, at the same time, post touching new highs in September,
01:09we have seen a healthy correction of about 11-12%.
01:13So, this correction is very healthy in the sense because we have seen this correction after a long time.
01:22A couple of factors were responsible for this correction.
01:27Earnings growth moderated down a little, valuations were a little stretched.
01:31And plus, there is a lot of uncertainty with regards to geopolitical situation.
01:35And with not Trump coming in power, so the kind of tariffs that he might impose once he swears in the month of January.
01:44So, there are lots of ifs and buts which can play out for the year 2025.
01:50So, keeping that in mind, we witnessed a healthy correction.
01:54But, post that correction, we have seen some recovery.
01:59Now, that recovery was led by the confidence which the investors got.
02:04Like, you know, when BJP won the state elections of Maharashtra and Haryana,
02:09toh kahi na kahi it gave them a moral boost because Lok Sabha election ke baad,
02:14somehow, the dominance of BJP had reduced a little.
02:19So, with the state election winning, it again reboosted their entire confidence.
02:26And now, everyone is confident that the CAPEX cycle,
02:31jo ki first half of FY25, toh aasa standstill mein chala gaya tha,
02:37that CAPEX cycle is expected to revive from the second half.
02:41So, from the Indian economy point of view,
02:45though the earnings have moderated in the first half,
02:48but then we expect that from second half, the earnings might start reviving.
02:53Now, a few key reasons for this is, like, you know,
02:57one, the valuations, at least in the large caps,
03:00they have aligned to the long-term average.
03:04So, the large caps, at least, like, you know,
03:06they provide that comfort in terms of valuation.
03:09In terms of, like, you know, earnings revival, which I am talking about,
03:14how that will come.
03:15So, like, you know, the monsoon was good.
03:19So, because of which the rural economy is expected to,
03:22like, you know, the demand from the rural side is expected to revive a little.
03:27So, that will provide a push.
03:29And then, given the good monsoon, the kharif season is expected to be good.
03:33So, that is there.
03:35Plus, if the CAPEX revives from here onwards,
03:38so, obviously, the whole lot of industrials and, like,
03:42capital good theme will start playing out.
03:45And if you'll notice one thing, this time,
03:48the festive demand was pretty healthy.
03:51I mean, all the management talked about good demand
03:54that they witnessed during the festival season.
03:57And with wedding season, like, you know,
04:0130% more dates this time compared to last year.
04:05So, the demand will get a push from there as well.
04:08So, we believe that though FI25 overall earnings will end in single digit growth number,
04:16but then second half or the second coin,
04:19like, you know, the other side of the coin will be better than the first half.
04:23So, I mean, like, you know, and then from FI26,
04:27because of the low base of FI25,
04:29the earnings growth will bounce back in double digit.
04:32So, on this note, we believe that, you know,
04:35the things are not completely bad, at least on the domestic front.
04:39Inflation is a little on the higher side,
04:42but then it is expected to, like, you know,
04:45cool down once the good Kharif season will progress.
04:48So, probably the inflation will start coming down.
04:51Now, the only question is the geopolitical situation,
04:54which is not really in our control.
04:57And what really will, like, you know,
05:00Trump do once he comes in power will actually provide the real,
05:04like, you know, direction to the market.
05:07Right, that's quite nice summary.
05:09I think what we'll also add on is monetary policy.
05:13The new governor of RBI has come and we are expecting,
05:16most specialists are expecting that, you know,
05:20a rate cut is going to come in February.
05:23So, I think that will also decide the direction of the market.
05:26Next year. Sneha, moving forward,
05:29this year we have seen many big IPOs, you know,
05:32Swiggy, NTPC Green and Wari Engineering, etc.
05:35Do you have any recommendations for the newly listed companies,
05:41what investors should look at?
05:43See, we like Swiggy, we like NTPC Green,
05:47Wari to some extent we really like the company,
05:50but then the only challenge with Wari is that
05:53because it is in the solar energy space and,
05:56like, you know, the major market for Wari is US market.
06:00So, we really, like, you know, not sure,
06:03Trump, what kind of, like, you know,
06:05tariffs he would impose on the solar modules and all.
06:09So, there we are a little skeptical till we get the clear cut clarity.
06:15Otherwise, Wari is the largest, like, you know, solar player.
06:19So, obviously, like, you know,
06:20and with very good healthy financials.
06:23So, we were quite confident on Wari,
06:26but then with Trump, like, you know,
06:28there's a lot of uncertainty, which is overhang,
06:31which is there on the stock.
06:32We're quite positive on NTPC Green as well,
06:35because looking at the portfolio that they have built so far,
06:40it is actually remarkable and they have got long,
06:44like, you know, goals set for themselves
06:47over the next five years, wherein they plan to take,
06:51I mean, like, you know,
06:52almost triple their capacity over the next five years,
06:55which is if they are actually able to act upon it,
06:59this will tremendously drive the growth potential for the company.
07:03So, NTPC Green, we're quite positive because, I mean,
07:07the government has got a huge focus on the overall green energy space.
07:12So, there are a lot of incentives,
07:15which is being given out.
07:16A lot of supportive policies are being rolled out
07:20in order to push the overall renewable energy.
07:24And NTPC being the largest player, obviously, stands to benefit.
07:30And when we talk about Swiggy, so, like, you know,
07:34Swiggy is operating in a duopoly market.
07:38You know, they have always been an innovator.
07:41Like, you know,
07:42it was Swiggy who came out with the concept of food delivery
07:46or they came out with the concept of quick commerce.
07:49Though they couldn't really, like, you know,
07:51kept pace with it and somewhere Zomato took over them.
07:55But then we believe that that innovation blood is there in them.
07:59They have come out with this 10 minutes delivery concept bolt
08:04in the food delivery space,
08:09which, like, you know, has got a very good response of late.
08:13And they're actually expanding it to various cities.
08:17So, they had launched it in just a few cities
08:19and now they're taking it on a larger scale.
08:21So, like, you know, that innovation blood is there.
08:25Now, what they really need to do is, like, you know,
08:27put all these strategies in place and capture the market.
08:31So, like, you know, if we compare both Zomato and Swiggy,
08:36both their food delivery business is stable and is doing pretty well.
08:40But Zomato has taken an upper hand in case of quick commerce,
08:44wherein Blinkit is doing very well compared to the Instamart,
08:48which belongs to Swiggy.
08:49So, therein, like, you know, Swiggy has to ramp up
08:53by, say, opening more dark stores
08:57and improving the profitability of each store compared to Zomato.
09:02So, if they are able to act upon it,
09:05then, I mean, see, the market potential is really huge.
09:10So, the market can absorb both the players.
09:12It's not about, like, you know, who will survive or who will not survive.
09:16So, it's just they need to work around their economics and become profitable.
09:21Blinkit is expected to become profitable by end of FY25
09:25or probably max by first quarter of FY26.
09:28Instamart will take some time to become profitable.
09:31So, they really need to, like, you know, work around
09:34and come up with strategy which will make them a profitable platform.
09:38And then, like, you know, both the players can actually coexist together.
09:43So, we're quite positive on Swiggy so far
09:46and hopefully, like, you know, the company should be able to work their way out.
09:51Right.
09:52Sneha, our social media, you know, readers, users,
09:58they keep sending us a lot of questions.
10:01You know, for homemakers or for students,
10:04probably those who don't have a lot of money to invest,
10:08but they still want to invest in some sectors or, you know, some plan,
10:13but they are not aware of where to invest,
10:16whether to invest in stocks or SIP or put it in a mutual fund.
10:20What are your recommendations for them?
10:23Shruti, this is a very interesting question.
10:25So, I hope this message is passed on to everyone through you.
10:30When you are an initial investor,
10:33you shouldn't really burn your hands with F&O or, like, you know,
10:37investing in any small cap companies.
10:40I mean, what is the mentality at that time?
10:43Like, if my neighbor gives me a tip, I invest in it
10:48without really knowing about the company because it's easy to enter.
10:52But then exit becomes really difficult and you end up making losses.
10:56So, as a starter, what you should really do is start with SIP in mutual fund
11:03or start with investment in index fund ETFs.
11:06So, through that, you will learn to track your market,
11:10you will understand its volatility and then once you are comfortable with it,
11:14then start investing in thematic funds and all
11:17and then smaller investments can be done in the stocks.
11:21But stocks, maybe I would suggest, go with, like, you know,
11:25investment in the cash market rather than F&O in the initial stage.
11:30Understand the market, understand the volatility,
11:32how different events, be it domestic, be it, like, you know, global,
11:37how they really impact the market and what is the kind of, like, you know,
11:42ups and downs that you see.
11:44So, that understanding is very important before you become, like, you know,
11:48intraday trader or a short-term trader.
11:51So, start as a long-term investor.
11:54Do a little reading, understand about the company and start with safe stocks,
11:59like, you know, large caps, blue chips or, like, you know,
12:02good known names in case of mid caps.
12:06And once you, like, you know, get that confidence,
12:09after that, you can explore as much as you want in the market.
12:13I am not saying that there will be no loss, obviously, like, you know,
12:16that's part and parcel of the investing journey.
12:19And unless and until you don't make losses, obviously, you will not learn.
12:23So, that's the entire process.
12:26And obviously, everyone should witness the bull and the bear face of the market.
12:32But having said that, as an initial investor,
12:36with a little selective approach, one should actually navigate the market.
12:41Right. Very, very well summarized, Sneha.
12:44I think it was a fantastic way of putting things in perspective.
12:49You know, if we don't have knowledge, then we should play it safe,
12:53probably for the first initial years.
12:56It was lovely talking to you, Sneha.
12:58Thank you so much for joining us.
13:00And I wish you, you know, a great year ahead.
13:03Thank you viewers for watching us.
13:05Thank you, Shruti.
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