Despite the markets seen to be overpriced, the bull run is likely to continue for a long time to come since the structural growth of the Indian economy will continue, believes Abhishek Tiwari, executive director and Chief Business Officer of PGIM India Mutual Fund.
In a telephonic interview with MintGenie, he also sheds light on the scope of growth that some good quality small and mid-cap stocks can offer. Mr Tiwari also says healthcare and pharma are likely to do well in the immediate future, while financial services – as a sector – is a ‘good buy’ for the medium to long term.
While sharing some pearls of wisdom with retail investors, he cautions them against their returns chasing behaviour which needs to be checked.
Edited Excerpts:
The market has broken several records in the recent past. Last year, the broader market index delivered around 20 percent returns. For how long, do you think the bull run will continue?
The structural growth of India will continue for time to come. Corporate balance sheets are getting stronger. So, the bull run will stay but there could be blips along the way.
How do you think the market will react to general elections?
If the outcome is the same as expected, it will be celebrated. However, the seeds of structural growth have already been sowed in terms of reforms and spending.
These all are the long-term drivers of the economy irrespective of what is going to happen.
Is this the right time to invest in large cap stocks since small and mid-caps are seen as overpriced?
From the valuation standpoint, large caps should be the best space to invest. But there is still humongous scope in the good quality and well-run mid and small cap companies. However, the inclination should be towards large caps.
Which are the sectors that are expected to do well in the near future?
Healthcare and pharma are the sectors that are likely to do well in the immediate future. Within these areas, hospitals and diagnostics look strong because of several reasons including medical tourism.
From the medium to long term perspective, specialty chemicals and financial services look promising. Financial services sector includes good AMCs, RTAs, depository companies and insurance.
What is the advice you want to give to retail investors?
At the baseline, SIP (systematic investment plan) is a good tool for investors. Also, the quality of products sold in the industry is very good. However, return chasing behaviour of investors should be checked.
Last financial year, there was a lot of focus on small caps. One should be wary, and assess their risk and goals and take investing calls accordingly.
What is the suggestion for investors wanting to invest in debt mutual funds?
Yes, on all counts. In fact, we have been promoting short-term debt mutual funds including ultra short term and money market mutual funds.
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Published: 20 Feb 2024, 11:59 AM IST