Vinay Pahadia, Chief Investment Officer of PGIM India Mutual Fund, says the third quarter results and management comments do not seem promising initial trends. Therefore, equity market fluctuations can last longer. In an email conversation with Abhishek Kumar, Pahadia said that the landscape of long -term has remained positive from mid -term. The main part of the conversation:
How long can the market remain in this realm?
One of the reasons is that the rapidly increased consumption after the epidemic seems to be weak now. In the first half of FY 2025, weakness came somewhat due to the adverse weather conditions and a decrease in government spending before the general election. This weakness may remain intact in the third quarter of FY 2025. Income growth may face decreasing income estimates, which may increase market fluctuations. However, the mid -term landscape for the equity market remains strong as the increase in GDP in the long term is expected to be strong.
Why is foreign portfolio investors rapid withdrawal?
Foreign investors focus on many things, including more attractive assessment of other markets. Their own domestic markets can be a reason to increase risk-free interest rates. The newest factor is Donald Trump to be re -elected as the US President. The US market is coming out of excellent capital flow while other markets are facing withdrawal.
From what point of view do you see the evaluation? Is this the right time for investors to increase their equity allocation?
Evaluation is higher than historical average, especially in midcap and smallcap segment. However, the evaluation varies from the quality of the company. Currently, low quality, low -growing stocks are trading in a status of evaluation such as bubbles, while high growth and good quality shares are available at reasonable prices. We do not think this is the right time to increase equity allocation.
Are you changing the sector of your portfolio.
We are excited at healthcare, telecommunications, consumer desire, private banks and information technology (IT) sectors. We remain positive on Quick Commerce, online food delivery, organized retail, many internet-based businesses and contracted manufacturers of electronic and pharmaceutical as well as other areas.
What are your expectations from the budget?
The government may emphasize the balance between fiscal discipline and economic growth between encouragement. It is expected that steps will be taken to promote consumption and more attention will be paid to increasing capital expenditure.