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    Markets well placed; India's trend much stronger: Sandip Sabharwal

    Synopsis

    ​So I think that growth for some reason in India is getting underestimated, especially on the industrial production side. In the global context also, I think things are stable so that helps India.

    Sandip SabharwalETMarkets.com
    And I think if they have been able to sustain their growth throughout the rate hike cycle, then now is not the time to worry so much.
    "I think that growth for some reason in India is getting underestimated, especially on the industrial production side. In the global context also, I think things are stable so that helps India. And it was expected that eventually we will see the foreign money come back into India as the outflows have reached a crescendo. So that is something also, which we see now, and that is normally supportive. I do not see the steady flow of foreign money stopping any time," says Sandip Sabharwal, asksandipsabharwal.com

    How are markets looking?
    Markets are I think fine, things are going well, macro wise there is no issue, the inflation data is getting controlled. I think IIP is subdued but somehow I think IIP composition in India is completely flawed if you look at the results of various companies and the growth figures being reported by them, they do not correlate with IIP growth.

    So I think that growth for some reason in India is getting underestimated, especially on the industrial production side. In the global context also, I think things are stable so that helps India. And it was expected that eventually we will see the foreign money come back into India as the outflows have reached a crescendo. So that is something also, which we see now, and that is normally supportive. I do not see the steady flow of foreign money stopping any time.

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    Finally, patience must have paid off for Tata Motors investors, one of the strongest quarters for the TML Group and even JLR FY24 guidance is looking impressive?
    Yes, things are positive from a projection standpoint. The only risk I see in Tata Motors is that the global economy is not looking as great and JLR largely relies on the global economic performance, both in the Western economies and China for its growth, so efficiency and productivity gains will obviously help them and profitability will improve but for volume growth to happen, we need to see the economic growth stabilise in many of the economies. And that could be a slight challenge for them in just this year. Overall, directionally, I think they are on the right path.

    We are talking about FOMO, for I guess the word FOMO really applies to foreign institutional investors. The way they made a comeback after selling India down, it is absolutely, absolutely incredible. FIIs sold India. They went to China in 2021 and 2022. Now they are forced to come back, and when they are coming back, they themselves are bidding the prices higher?
    So that is the challenge in value investing that value investing without growth becomes a value trap and that is what China is today. All of us need to recognise that the structural issues in China are so great, both related to their overinvestment cycle for almost a decade combined with the high debt of the local governments a lot of which is written under different structures and the fact that they have reached a demographic peak and given their demographics, the population decline over the next 10, 15 years is going to be so steep that it will be a negative impact on GDP.

    A lot of these investors do not do that long term analysis they just look at valuation and invest, which is somewhat flawed. So I think India's trend is much stronger and I believe that over the next one or two years, this phenomena will even get more entrenched.

    At this current juncture if markets are looking good and decent, what should be the best strategy, ride the momentum, do not be in a hurry to sell, the best of the summer rally of 2023, that is not over?
    I do not think the rally is over because the rally just started last month and if we see after four months of all the markets are just 4-5% or I think slightly more than that, so it is not that we have had a runaway 10-15% rally and then we need to worry about it.

    So overall, markets look well placed and depending on what people are investing into, I think holding your horses is the best strategy. Normally, I do keep some cash on the sidelines as an all time strategy, so that whenever there are some very good opportunities come we can deploy it. But ex that, one should be more or less fully invested.

    Real estate, that is one space that you track and just looking at DLF’s performance the Q4 collections came at Rs 1929 crores versus Rs 1398 crores the market was anticipating. So a clear beat there, and their net debt as well has declined. Having said that is the best already baked in, in the price at Rs 435?
    I do not think so because I believe that real estate stocks, especially if you are talking in the context of DLF it had a good run up from 2020 in 2021. 2022 almost for 15-17 months, it had a phase of consolidation when the monetary cycle was on up cycle. And as the monetary cycle has peaked, we have seen that from there the real estate stocks again started to outperform.

    And I think if they have been able to sustain their growth throughout the rate hike cycle, then now is not the time to worry so much. So I would be positively inclined, I would still think that DLF should have more upside given the recent data which they put out and their outlook.




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    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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