00:00Namaskar, my name is Digvijay Singh. Welcome to Good Returns. Today we will talk about our focus on the stock market.
00:07We are talking about the market because we are seeing a lot of corrections.
00:10Since September, when we saw the market record high, we have been seeing a lot of corrections.
00:17High valuation, tariff, these are all triggers. We will understand them.
00:21Where is the opportunity to invest in this decline? Which stocks are getting attractive valuation?
00:27Which sectors are in focus? What are the triggers ahead?
00:31The financial year is going to start from April. What is the market outlook in that?
00:37We will talk about that. With us is the Research VP of Motilal Oswal Financial Services, Sneha Poddar.
00:43Ma'am, welcome to our show.
00:46Thank you very much, Mr. Digvijay, for inviting me. It feels good to be with you.
00:53What is happening in the market right now? Is there only a tariff impact?
01:02Or is there any other trigger?
01:04Mr. Digvijay, the corrections in the market have been going on for the last 4-5 months.
01:11The slowdown in high valuations and earnings was due to some factors.
01:20The macro factors were also feeling a little tired.
01:25The correction started with these factors.
01:30Trump started the tariff war.
01:34Before that, Trump started passing some statements after the election.
01:42This gave an idea that there could be a result in the trade war.
01:49In anticipation of this, the market was continuously in a correction mode.
01:56The FIS was not getting comfort due to high valuations and earnings.
02:01The dollar index was also going high.
02:04The continuous outflow of the FIS and the continuous fear were the reasons for the correction in the market.
02:15In today's time, the valuation on the domestic front has reached its fair level.
02:24Especially in large caps.
02:26In mid-cap and small-cap, there is still a little premium valuation.
02:30So, there are chances that we can witness more corrections.
02:34There are definitely some pockets where there are opportunities.
02:37But in mid-cap and small-cap, there is still no volatility.
02:43So, there is comfort in large caps from the valuation front.
02:46But in earnings, we can still see a slowdown in some quarters.
02:52If we look at the overall trend, there is a slowdown in domestic consumption which will recover at a gradual pace.
03:01Plus, the global uncertainty that has been created due to the tariffs.
03:05So, it is very difficult to ascertain what impact it will have.
03:11So, the coming time will tell us about the impact of the tariffs on India and other countries.
03:18So, we can make a concrete call on earnings to see how tight the earnings recover from here.
03:25So, the correction that we are seeing right now, if we talk about February,
03:29the main index, the S&P, there is a slowdown of 5-6%.
03:34If I look at it from the perspective of March,
03:37So, what level are you looking at?
03:39You are saying that it is difficult to say anything about the tariffs.
03:42Still, if you have to look at Nifty or Sensex at some level,
03:45when the financial year ends in March,
03:48what level are you looking at, ma'am?
03:50Nifty, it is possible that there will be a bounce back from here.
03:55We have already seen a little bounce today.
03:58And there is hope for a little more bounce.
04:01Because somewhere people have this hope that Canada, Mexico, China are imposing retaliatory tariffs on the US.
04:11So, it is possible that the US provides them some relief in terms of tariff hike.
04:16So, if this relief comes, then this relief rally will continue for some time.
04:22But towards the end of March, again, we can see that the market may come down a little.
04:29Because the tariffs that are going to be announced in India,
04:33we will get clarity till 2nd April that what tariffs are going to be imposed in India.
04:39So, nearer to the end of March, we can probably see that volatility again.
04:45But in the meantime, there are high hopes that there can be a little short-term recovery in the market.
04:51There is a news in the market that when the sentiment is bad, people make different targets for Nifty.
04:59No analyst has said this.
05:01But the news is that Nifty can slip to the level of 18-20,000.
05:08What is your opinion on this? Can Nifty come to this level?
05:12See, when the sentiment is bad and the levels start dropping,
05:18then it becomes a very bearish environment and it is very natural to get pessimistic in that environment.
05:24But if we evaluate on the basis of fair valuation,
05:28then on the basis of that, our guess is that Nifty may be 21,800 or 21,300 max on the lower side.
05:38In that case, the markets should stabilize.
05:42Because in sharp downfalls, Nifty's P's become a fair value at that level.
05:50You can catch the level of 21,300.
05:53But beyond that, if something worse comes, then you can expect beyond that.
06:00Otherwise, at the levels of 21,300 or 21,800, the market should stabilize somewhere in between.
06:06Yes, so this is the current level.
06:09But the biggest trigger for correction is the selling of FIIs.
06:13What do you think, when we enter the new financial year, is there any trigger?
06:18What do you think, based on the valuation concern, how long will FIIs become net buyers?
06:24Bikwali is going on continuously.
06:26In this year, in just 2 months, they have sold more than 1 lakh crores.
06:32It is very difficult to say when FIIs will become net buyers.
06:37Because there are multiple global factors involved in this.
06:40In the future, will the interest rate be cut or not?
06:43In which countries does Trump impose tariffs?
06:48It is also a matter of imposing tariffs on Europe.
06:50And there are other emerging markets like India.
06:54So, what will be the repercussions of all this?
06:57That will decide how long FIIs will stay away from the emerging markets.
07:02And as I said, domestically, in terms of earnings, the sentiment is not very positive.
07:12It is possible that these earnings will pick up very gradually.
07:17We can say that from the second half of FY2026, FIIs may start returning.
07:26Because then the earnings will stabilize and come in a recovery mode.
07:31And by that time, there will be a lot of comfort in the valuation.
07:35And things will be very clarified on the global level.
07:39So, by that time, we can expect that FIIs may start their entry again.
07:45Another veteran investor has said that the capital gain tax that has been increased by the government
07:57is also having an impact on FIIs.
08:00So, what is your take on this?
08:02Is it necessary to raise this question that the increase in capital gain tax has had an impact on FIIs?
08:11Capital gain tax has not been increased for the first time.
08:16Capital gain tax has been increased in history.
08:19We definitely see its short-term impact.
08:22But it will not have such a long-term impact.
08:27And this buzz has been in the market for a long time that capital gain tax can increase.
08:32So, somewhere it was a factor.
08:35I don't think it has an important role.
08:38What is more important for FIIs is the level of the US dollar.
08:46What will be the interest rate scenario in the US?
08:48Because it will ultimately decide which market is lucrative.
08:52US market or Indian market.
08:54So, there are only a few days left for the start of the new financial year.
08:58In the new financial year, where do you see Sensex and Nifty?
09:06And what will be the big events that will be seen by the market?
09:11If we talk about the levels in FII 26,
09:16the market will stabilize in 2-3 months.
09:23And after that, we may witness a time correction.
09:27Because earnings will not be very supportive.
09:30So, the recovery in earnings from the second half will obviously be a trigger point.
09:38So, if we talk about the market levels,
09:41we can expect to bounce back to 24,000 or 25,000 levels.
09:49Preaching the previous high is a little difficult in FII 26.
09:56So, let's hope for the best.
09:59But the key events will be Trump's tariff policy.
10:06And how much it will escalate in the trade war will be an important factor.
10:11Plus, the current geopolitical situation on a global level.
10:15So, it is very important to have stability there.
10:20A positive point for India is that due to geopolitical issues,
10:26oil prices have started to fall.
10:30Because India is a net importer,
10:34lower oil prices are definitely beneficial for us.
10:39So, it will help to lower the raw material prices of companies.
10:46But there are many other factors involved.
10:49Plus, the second important factor is that
10:52does RBI take more rate cuts or not?
10:57Will it follow the steps of the US and halt here?
11:01Or will it take more initiatives?
11:03So, there are multiple factors involved.
11:06And the current situation is very volatile.
11:08And it is very difficult to take a call.
11:10But the markets should recover after another fall.
11:15And it will try to reach its previous high.
11:19It depends on how fast the earnings will recover.
11:23So, the market has recovered a lot.
11:26And it looks like there will be a recovery in the future.
11:29But there is a high possibility that the correction will continue.
11:32If I talk about investment in this correction,
11:34in which sector is the opportunity being created?
11:37Usually, it is believed that when the market falls,
11:40one should invest and take advantage of it in the long term.
11:43So, which sector do you focus on?
11:46IT, banking, financial, auto?
11:49Which sector do you focus on?
11:51Sir, if you have noticed in the budget,
11:55the high focus of the government is on consumption revival.
11:59So, we hope that the consumer discretionary segment
12:05will gradually start reviving from here.
12:08Recovery has already reached the rural level.
12:11Now, the urban slowdown,
12:14we should gradually see a recovery from Q1 to Q2.
12:19So, the discretionary sectors like retail, jewellery segment,
12:24travel industry, auto,
12:27we can see a recovery in these sectors.
12:31Because if the consumers get extra income,
12:34their purchasing power will increase.
12:38Like higher spending areas,
12:41where there are discretionary items,
12:43the money can flow there.
12:45Secondly, if we talk about investment,
12:48in the BFSI sector,
12:50both the NBFCs as well as the banking sector,
12:53the valuations are very comfortable there.
12:55Especially in the NBFCs, the valuations are very comfortable.
12:58And post RBI rate cut,
13:01their credit costs are being picked out here.
13:05So, from here, a very good investment is being made for the NBFC sector.
13:10Banking is also comfortable in terms of valuations.
13:13And if we see,
13:14we have seen a little moderation in the credit pickup,
13:19but the asset quality is very good for both the private and public sector banks.
13:24So, the banking and NBFC valuation perspective is very comfortable.
13:28Consumer discretionary, as I said,
13:30a pickup is expected after a long period of time.
13:34So, that will definitely help the sector.
13:36So, give us a stock pick in this line.
13:38So that our viewers can see,
13:40in terms of long term and short term,
13:42if you can recommend a stock pick.
13:45For short term, I will recommend Varun Beverages.
13:49In the coming time,
13:51the summer season has almost started.
13:53In some states,
13:57Feb was comparatively hotter compared to many previous years.
14:02So, the early onset of summer has started.
14:05So, the volumes are still very strong for these companies.
14:09Plus, we saw a sharp correction in Varun Beverages.
14:14Because when Reliance announced Capacola,
14:16there was a lot of fear of competition.
14:18But we believe that the market is very wide
14:21and there is a lot of scope for different players to survive in it.
14:25So, this will help the overall market to grow.
14:30Competition is not a big factor.
14:32And because the summer season is coming,
14:34the volume will increase.
14:35Plus, it is expanding very fast in the Africa market.
14:39And the market is picking up very well.
14:41So, keeping these factors in mind,
14:44I will recommend BBL.
14:46My second pick will be ICICI Bank.
14:49ICICI Bank consistently delivered very good results
14:53in the market.
14:55Plus, its asset quality is always increasing.
14:59And it is gradually moving towards a high-yielding portfolio
15:04with high margins.
15:06So, the focus is more on these products.
15:09Plus, we saw good growth across the product lines.
15:13So, from a long-term perspective,
15:15I would recommend ICICI Bank.
15:17Thank you very much.
15:18You took the time to talk to us.
15:21And gave valuable advice to our viewers.
15:23And gave a stock pick.
15:24And there is no need to worry in this market.
15:27We need to stay strong and have a strong strategy.
15:30Thank you, Sneha, for your time.
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