“Cyclicals, commodities, capex are the most promising segments in the market,” says Somnath Mukherjee, CIO & Senior Managing Partner – Product & Research, ASK Private Wealth.
In an interview with ETMarkets, Mukherjee said: “India’s a structural growth story, so expect FII flows to remain quite good. The real breakout will be the start of US rates cuts,”. Edited excerpts:
As we step into FY25 – how do you see markets in the next financial year? Do you see a double-digit return?
Somnath Mukherjee: Markets are pricing in multiple best-case scenarios currently – a)Current Ruling Party’s victory in elections, b)inflation continuing on its downward trajectory, c)US rate cuts sometime during the year, and d)conflict zones remaining non-disruptive.
By definition, these are the “best case scenarios”, one or more of them may disappoint. In this case, markets could be disappointed disproportionately. Risks and rewards are quite evenly balanced right now.
In terms of earnings – how do you see India Inc. faring in FY25. P/E multiple has expanded but there is a lot of catch-up which earnings have to do. Do you see earnings recovery in FY25 especially in the small & midcaps space?
Somnath Mukherjee: Earnings growth has come off significantly, and small and mid (SMID) stocks a bit