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Time of India
13-06-2025
- Business
- Time of India
Consumption and infrastructure 2 top compounding themes in market now: Sumit Bhatnagar
Sumit Bhatnagar , Fund Manager, LIC MF , says consumption is expected to rise and can be a top compounding theme as factors that slowed it down recede. Rural consumption has revived and urban consumption should follow. Tax cuts and RBI measures on unsecured loans will help. Government pay commissions in FY27 and FY28 will inject funds. The second compounding theme is infrastructure. India needs infrastructure investment in power, ports, railways, and roads. Focus on infrastructure is expected to continue. After that RBI bazooka of repo and CRR cuts, the Indian markets were seen to be trending higher, but given the fact that the crude oil is now showing a surge in the international market, what do you make of the market and where are we headed from here? Sumit Bhatnagar: We are positive on the markets over the near term. We are seeing a very clear sign of economic revival as also a potential for corporate earning revival as well. If you look at the global environment that we are in, both the IMF and World Bank have cut their global growth estimate by 50 bps. In that kind of an environment if your economy is growing at 6.5%, it is still a pretty decent number. With the recent policy measure that you just mentioned by the RBI both on the monetary side as also the regulatory step that they had taken earlier, it provides a significant support to your economic growth outlook. If the credit growth revives and if the credit growth picks up, then there can be a small positive surprise on the RBI GDP growth estimates as well. In that kind of an environment, markets should do well from here onwards also, but that should broadly be in line with the corporate earnings expectations which we expect to be in a low double digit return, low double digit over next one or two years. In so far as crude is concerned, even at $70 crude is not a major concern for us as it is within the budgeted numbers, its impact on inflation can easily be managed. What are some of the top secular or compounding themes in the market right now? What are you liking among the sectors at the moment? Sumit Bhatnagar: The top compounding themes to my mind would be consumption now. What has happened is that over the last two years consumption has lagged, but now the factors that were impacting the consumption or leading to slowdown are slowly receding. While we all know that rural consumption has revived, urban consumption also should now revive over the next one or two years. Live Events You Might Also Like: Buy on dips if you believe in long-term India growth, 3 investment themes to bet on: Mihir Vora One is led by the tax cuts that the government has announced. Secondly, the steps that RBI has announced in so far as your unsecured loans are concerned should also help in revival of urban consumption. More importantly, in FY27, we expect central government's pay commission to come in and at the same time, one year later, maybe in FY28, some state government pay commission should come in and that should push in around Rs 2.5 lakh crore into the hands of one-and-a-half crore employees and that should provide some bit of a support to consumption. The second compounding theme is infrastructure. We think India still is very underinvested in so far as infrastructure is concerned, including power, power transmission, ports, railways, and roads. If you are planning to be a major manufacturing hub, you want to be a China plus one type of an alternative, there is no choice but to invest heavily into infrastructure. Both the central and state government's focus continues to be on that. Last year may have been an aberration. We expect focus to continue going forward. So, these two would be the key themes for me. Help us with your take on the IT pack as well. The sector has not participated much in the recent rally that we have seen, but for the past couple of days, select IT counters were buzzing. Is there merit to once again look into any of the IT counters? Can they do well? Sumit Bhatnagar: IT as a pack is in a very tricky situation. While valuations have corrected somewhat over last six months led by global uncertainty, if we do not see a revival in global growth, if uncertainty around us does not recede or US-China does not recede, we can continue to see disappointments in it, so that is one space where there is a potential of a downgrade if the global uncertainty does not recede per se. And if you talk about the overall market construct right now, Q4 FY25 earnings have been better than what the Street was estimating. On the back of this, do you believe there are any sectors that need to be relooked or revisited in terms of any rerating, derating perhaps? Sumit Bhatnagar: Broadly we expect low double digit type of earnings at a largecap level over next two years. But in terms of sectors, maybe financial, both banks and NBFCs can now surprise positively. The recent RBI measure can help banks in managing the NIMs much better with a CRR cut that they have announced. You Might Also Like: Next biggest opportunity will be thrown up by manufacturing in India: Mihir Vora Plus, frontloading of the repo rate cut should help NBFCs as well. With credit growth revival, there can be earnings surprises in both these segments. Secondly, telecoms with the possibility of a tariff hike can surprise positively on earnings. Cement, we expect to do well with the prices holding up firmly and with the volume growth of 6-7%, cement can surprise on upside in so far as earnings are concerned. Consumption over the next two-three years can surprise if demand picks up. Drivers are now getting in place for demand revival, but we need to watch out for that. What is your take on metals? We believe the government is likely to hike the safeguard duty on the steel products beyond 12% and on a month-on-month basis, we are seeing domestic steel production inching higher. What will impact the steel stocks? Will it be the demand, will it be the price, or will it be supply? Sumit Bhatnagar: Our sense is that in the entire metal space, steel is one segment that should do reasonably well. Even without your government support on anti-dumping or safeguard duties, steel volumes were still growing at a pretty healthy 8-9%. And with the government's plan to hike duty to 24%, it could only reduce the cheap Chinese imports that are coming in. So, maintain a positive view on steel, but valuations also need to be looked at in steel stocks. What is your take on emerging sectors like aviation as a subsector of defence? We have already seen a significant runup in some of these defence counters. Would you still continue to be bullish on defence and also aviation in terms of drones as a subsector of defence? Sumit Bhatnagar: So far as defence is concerned, till about a month back, it used to be a narrative sector, but after the proof given in Operation Sindoor , the narrative part is over, now they can actually offer a very attractive opportunity over a medium to long term. With the kind of proof that we have seen, we do expect some bit of an inquiries or increase in inquiries for your defence platforms as well. Earlier, we used to export support consumables, but now platforms also are a fair game but that is going to take time. So, in so far as near-term is concerned, the recent rally prices in a lot of positives and space as a whole may be a fairly priced or maybe inching towards valuations as well. You Might Also Like: ETMarkets Smart Talk: Defence stocks may face bumpy ride despite big potential, says Asit Bhandarkar In so far as drones are concerned, we have seen the importance of drones in Operation Sindoor per se and even in Russia-Ukraine war. Now drones are a very effective weapon system as well. Drones have both a defence as also your industrial application. As a space, drones can do well, but unfortunately there are not many options available to play this space.
Mint
11-06-2025
- Business
- Mint
Overweight on financials, industrials; power, railways, defence look attractive for long term: Mihir Vora, TRUST MF
Expert view on markets: Mihir Vora, CIO at TRUST Mutual Fund, believes the medium-term outlook of the Indian stock market is positive. He underscored that healthy earnings and valuation comfort are driving the mid and small-cap segments. In an interview with Mint, Vora shared his views on markets and sectors he is positive about. Here are edited excerpts of the interview: The medium-term outlook is positive, albeit with risks in the background, and there are quite a few potential triggers which can potentially take the market to new highs. Macro conditions in India are firming up. GDP for Q4FY25 surprised positively at 7.4 per cent, driven by a steady expansion in private consumption on the rural side and capex momentum in government spending. CPI inflation eased to 3.2 per cent, staying well below the RBI's upper tolerance. Forex reserves climbed to $693 billion, liquidity conditions turned surplus, and the manufacturing PMI remained robust at 57.6, signalling sustained momentum. May saw the highest monthly FPI inflows in eight months, while DIIs continued their net buying streak. The market has re-rated sharply over the past year, but with forward earnings growth of 12-15 per cent, supported by private capex, corporate deleveraging, and strong domestic demand, there's fundamental backing to this optimism. The recent terrorist event and India's swift, decisive response led to a surge in domestic confidence. Strategically, India's firm stance against future attacks and its demonstrated military precision added to the country's geopolitical credibility. RBI provided an extra boost to growth sentiments with a sharp rate cut and CRR cut, clearly indicating a pro-growth stance as inflation is under control. The global backdrop is positive, and many central banks are cutting rates. Overall, financial conditions are easy and conducive for risk assets. A deeper correction would probably be triggered by external factors rather than internal. Trade wars, currency volatility and other geopolitical issues may impact the markets in the short term. The midcap and small-cap segments had seen a time and price correction in the last six months. This led to valuations going from expensive to a more reasonable zone. The earnings season has been quite good for midcaps, which has triggered the success of these and small-caps. Most of the sectors doing well are the ones that did well in the previous run. And now, with the RBI policy, even the financials are catching up. We continue to believe that the domestic sectors will do better than the global sectors. We are positive on financials, industrials, selected utilities and selective consumer discretionary segments. The other places where we see good growth on a long-term basis are segments like power transmission, distribution, railways, defence, renewables, etc. We have been bullish on defence for quite some time and continue to do so. We believe it is a very long-term story as the segment has just begun to emerge in the past few years. It is not very often that you can get entry into a segment with a long runway just as the sector is beginning to open up and grow. The key trigger is the opening up of the sector to the private sector. Now, apart from local demand, we can cater to the global defence markets, which have far larger potential. As far as PSUs are concerned, we do not consider all PSUs as a monolithic segment. It consists of stocks in many different sectors, and we analyse each stock on a standalone basis rather than using the same broad brush to paint all of them. Macro fundamentals, policy clarity, and broadening sectoral participation provide a solid backdrop. While global risks remain, India's resilience and reform-driven growth make it a compelling structural story. Volatility may continue, but investors with a disciplined asset allocation and long-term perspective should stay invested. We are positive on the domestic sectors compared to the global. We are overweight on financials, industrials and underweight in consumer staples, utilities, energy and consumer discretionary. India has the least dependence on exports as a percentage of GDP. While there will be a global impact and India may not remain completely untouched, we believe that we will be able to tide out through the crisis with a good diplomatic approach and the strength of domestic demand. India will continue to remain the fastest-growing large economy in the world. Inflation is not a concern as our fiscal and monetary policy has been quite prudent. We are seeing flows in both our funds, and even our small-cap fund is close to ₹ 1,000 crore in assets. We follow a market-cap agnostic approach and pick and choose the best stocks across all market-cap buckets. While the allocation changes from time to time, currently, less than 50 per cent of our portfolio is allocated to large caps. Read all market-related news here Read more stories by Nishant Kumar Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions, as market conditions can change rapidly, and circumstances may vary.
Time of India
10-06-2025
- Business
- Time of India
How 50 Bajaj Finance shares will turn into 500 by June 27. Explained
The board of Bajaj Finance announced two major corporate actions—a stock split and a bonus issue—alongside its Q4 results, released in April. The stock split is set to take place in the ratio of 1:2, while the bonus issue will be done in a 4:1 ratio. The company has set Monday, June 16, as the record date for both the stock split and the bonus issue. So, if you're a shareholder with Bajaj Finance shares in your Demat account by the close of trading on Friday, June 13, you're eligible. Here's a simplified breakdown of what these corporate actions mean for you, taking into account that you hold 50 shares of Bajaj Finance: What is Happening? Stock Split: Bajaj Finance is splitting each existing share with a face value of Rs 2 into two shares of Rs 1. This means your shares will double in number, but each share will be worth half as much in terms of face value. The market price is expected to adjust accordingly. Bonus Issue: Along with the split, the company is also offering a 4:1 bonus issue, which means you get four extra shares for every share you own. If you own 50 shares, here's what you get: First, you'll receive 200 bonus shares (4 bonus shares x 50 shares). That brings your total to 250 shares (original 50 + 200 bonus). Next, all these 250 shares will undergo a stock split into two shares each. After the split, you'll end up with 500 shares in total. However, it is important to note that while the number of shares increases, the overall value of your investment remains the same because the price per share will adjust proportionally. Also read: Buy on dips if you believe in long-term India growth, 3 investment themes to bet on: Mihir Vora When will this happen? Bajaj Finance has stated that the allotment of bonus shares and the stock split will be completed on or before June 27. Why does this matter? Such corporate actions are often seen as investor-friendly moves. They increase liquidity, make the stock more affordable for new investors, and may boost trading activity. While they do not directly increase the company's value or investor wealth, they can have positive sentiment effects in the market. So, if you're a Bajaj Finance shareholder with 50 shares, expect to see 500 shares credited to your Demat account post June 27. Bajaj Finance share price history Over the past year, the shares of Bajaj Finance have delivered a 34.90% gain. On a year-to-date (YTD) basis, it has risen 37.84%, while the six-month return also stands at 37.88%. In the last three months, the stock has gained 14.60%, and in the past one month alone, it has advanced 10.66%, reflecting sustained positive momentum. At 12:35 pm today, Bajaj Finance shares were trading nearly 1% lower at Rs 9,520.55 on the BSE .
Economic Times
10-06-2025
- Business
- Economic Times
How 50 Bajaj Finance shares will turn into 500 by June 27. Explained
The board of Bajaj Finance announced two major corporate actions—a stock split and a bonus issue—alongside its Q4 results, released in April. The stock split is set to take place in the ratio of 1:2, while the bonus issue will be done in a 4:1 ratio. ADVERTISEMENT The company has set Monday, June 16, as the record date for both the stock split and the bonus issue. So, if you're a shareholder with Bajaj Finance shares in your Demat account by the close of trading on Friday, June 13, you're eligible. Here's a simplified breakdown of what these corporate actions mean for you, taking into account that you hold 50 shares of Bajaj Finance: What is Happening? Stock Split:Bajaj Finance is splitting each existing share with a face value of Rs 2 into two shares of Rs 1. This means your shares will double in number, but each share will be worth half as much in terms of face value. The market price is expected to adjust accordingly. Bonus Issue: ADVERTISEMENT Along with the split, the company is also offering a 4:1 bonus issue, which means you get four extra shares for every share you you own 50 shares, here's what you get: First, you'll receive 200 bonus shares (4 bonus shares x 50 shares). ADVERTISEMENT That brings your total to 250 shares (original 50 + 200 bonus).Next, all these 250 shares will undergo a stock split into two shares each. ADVERTISEMENT After the split, you'll end up with 500 shares in it is important to note that while the number of shares increases, the overall value of your investment remains the same because the price per share will adjust proportionally. ADVERTISEMENT Also read: Buy on dips if you believe in long-term India growth, 3 investment themes to bet on: Mihir Vora When will this happen? Bajaj Finance has stated that the allotment of bonus shares and the stock split will be completed on or before June 27. Why does this matter? Such corporate actions are often seen as investor-friendly moves. They increase liquidity, make the stock more affordable for new investors, and may boost trading they do not directly increase the company's value or investor wealth, they can have positive sentiment effects in the if you're a Bajaj Finance shareholder with 50 shares, expect to see 500 shares credited to your Demat account post June 27. Bajaj Finance share price history Over the past year, the shares of Bajaj Finance have delivered a 34.90% gain. On a year-to-date (YTD) basis, it has risen 37.84%, while the six-month return also stands at 37.88%. In the last three months, the stock has gained 14.60%, and in the past one month alone, it has advanced 10.66%, reflecting sustained positive momentum. At 12:35 pm today, Bajaj Finance shares were trading nearly 1% lower at Rs 9,520.55 on the BSE. (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times) (You can now subscribe to our ETMarkets WhatsApp channel)
Economic Times
09-06-2025
- Business
- Economic Times
Buy on dips if you believe in long-term India growth, 3 investment themes to bet on: Mihir Vora
Mihir Vora, CIO, Trust Mutual Fund, advises investors to view market dips as buying opportunities, emphasizing the importance of patience and conviction in the long-term India growth story. He highlights the potential of financialization of savings, physical asset creation, and digitization, particularly in new-age and disruptive business models, as key investment themes for the next 5 to 10 years. We were just talking about how picture perfect this scenario is. You have got lower inflation, and lower EMIs thanks to the RBI. Lower taxes were taken care of in the Budget itself and good monsoon as well as lower interest rates. Is this construct best suited for the markets? Mihir Vora: Absolutely. You said it all. It is a long list and broadly we can summarise it by saying that the financial conditions are as loose as they can be and it is the case not only in India, even globally, central banks have been cutting rates in the last few months at a record pace. So, there is a case for a risk-on trade and that is what we are seeing in the world as well as in India. If you see the Dow, the US markets are also at near highs. We are also touching our highs. It is broadly a risk-on trade fuelled by easy money, easy financial conditions, so enjoy the ride. Are MFs sitting on cash or are you guys specifically all in? Mihir Vora: We typically do not keep more than 5-7% cash, so we are not sitting on large amounts of cash. But in general, the MF industry has normal levels of cash, nothing to write home about in a sense it is not extraordinarily high or extraordinarily low. There is enough ammunition on the sidelines and we can see that in the numbers MFs are buying on a daily basis. The kind of frontloading that RBI has done well, starting with financials, will trickle into a lot of sectors – be it real estate, autos or consumer discretionary. What is your preference list like because in terms of the stock picking, financials is one of the sectors that you are betting on, but in terms of the preference, how do you line it up? Mihir Vora: That there will be a knee-jerk reaction to the rate cut is a given. So, should see that impact in the next few days also. We saw some impact on Friday, but it should continue for a few days. But if you look at the aggregate picture, the demand conditions on the urban side are still not picking up. For example, two-wheelers have started picking up a bit, but cars have not picked up and plus on in auto you also have the threat of China holding back some of the crucial raw materials for magnets, etc. In real estate, sales have been robust on the high end side while on the low end side, there is still traction to come. The government has realised that the RBI and the government tightened too much last year. RBI was anyway keeping things tight and the government also slacked off on spending because of the election. If you look at the March numbers, the government spending really shot up quite a lot. So, the government and the RBI are both trying to play catch-up to make sure that the impact of last year does not stay too long. We did see a cyclical slowdown and they are now trying to make sure that we do not overdo the mistake of last year. So, maybe they are probably even overcompensating which is not a bad thing. In your most recent report you have mentioned the seven drivers of the next two decades in India. Tell us a little bit more about that and the sectors that stand to gain the most. Mihir Vora: These are more of the macro trends or mega trends if you say, things like demographics, digitization, democracy which are part of our structural story. Then, you have things like digitization which is technological disruption in which India has actually leap-frogged into a lot of technology and then, you have things like physical infrastructure creation which is going to be the story for the next few years because if we have to compete with China, we have to create a lot of infrastructure. So, the seven Ds basically talk about these seven mega trends. The themes that arise from these are basically financialization of savings, physical asset creation. In financialization of savings all the lenders will do well because we have to grow at GDP plus, but then the capital market players, the wealth managers, the broking, the asset management will continue to do better. Everything will tap into the higher savings pool because as income levels rise, the savings pools rise at a rate which is much faster than GDP the capital-market linked, the savings-linked players will grow faster than the lenders. Physical asset creation is all the things that we talk about in terms of job creation, China plus one, Make in India, aatmanirbharta, defence, T&D all the sectors where we have to invest a lot to sustain this 6-7% growth is the physical asset creation theme. So, financialization of savings, physical asset creation and the third theme that we like is digitization where basically new-age companies, new business models, disruptive business models those are the kind of things that we like. And these are plays for the next 5 to 10 years, so we will just stick to them. But when you look at 5 to 10 years, everything looks quite okay, but everything in the market is a function of the price at what you have bought or paid… Mihir Vora: And the point is that with these valuations and these kinds of market levels, you have to take a longer-term call. Yes, you have no option. But that is what I am saying, listening to you if someone says okay, I want to put my money now into capital markets themes, where is the opportunity because you have already seen such a big runup. Mihir Vora: Here is where our inherent philosophy of terminal value investing comes into play because the way we look at it is that markets end up optically paying a higher premium for stocks which have a long runway of growth. If in the runway of growth, for example, the capital market players are not 3-4 years, but 10, 15, 20 years, then these stocks will continue to look optically expensive on the next year's PE or the two-year, three-year forward PE. The point is that the market is assuming or giving credit to the fact that these sectors probably will grow at say 10-15% or 15% to 20% not for six-seven years, but maybe even for 15 years. Now, no analyst builds in a growth rate of more than 7-8% beyond 10 years, that is where the philosophy goes wrong because we have seen year after year in the last 30 years there have been so many stocks and sectors which grew for 15%, 20%, even for 20 years, that is where the valuations start look expensive and these stocks even 20 years back looked expensive and five years ago also they looked expensive. NSE is not even listed and it is quoting all that valuation. Mihir Vora: Exactly. In high growth stocks and sectors, especially stocks and sectors where the runway of growth is very long, you will end up paying optically higher premiums in the shorter term. Back in March and April, there was a broad-based selloff rather than the consensus call to stick with the largecaps. Now you are highlighting that it is a risk-on in the markets. Do you believe that now is the time and given the way fundamentals are shaping up, can one start allocating more towards the SMIDs? Mihir Vora: Definitely, I think every dip is a time to buy frankly because it is about patience and conviction. Your patience will be tested but your conviction will be rewarded. In times like these you really go and check it out. Even if you have the courage and the capacity, add more because ultimately you will have to take a longer-term call on the India story – whether India will do better than the rest of the world over the next 10, 15, 20, years. If the call is yes, then every dip is a time to buy.
