ETMarkets Smart Talk: Investors should taper returns expectation in 2024; focus on quality businesses: Sahil Kapoor

economictimes.indiatimes.com:

“Investors should taper their returns expectation, focus a lot more on the quality of businesses in portfolio and the valuations they command,” says Sahil Kapoor, Market Strategist & Head — Products, DSP Mutual Fund.

In an interview with ETMarkets, Kapoor said: “Over the last 3 years, investors have been able to record nearly 20% CAGR returns which are unlike our long-term returns,” Edited excerpts:

Want to take exposure to a sector which grows much faster than GDP

Markets are trading near record highs as we approach the Interim Budget 2024 or the Vote on Account – what are your expectations?
Sahil Kapoor: This budget by virtue of being a ‘Vote on Account’ is unlikely to make major announcements. Over the past few years, the Government of India has highlighted that the Budget is an exercise in accounting and taking stock.

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It is not a policy-making day. We look forward to a budget that promotes continuity in a stable tax regimen and enhances economic visibility for households, private businesses, and state-owned enterprises.

What can derail the current bull rally on D-St – is it the fiscal deficit number or probably we see some profit booking post the event? Will the Fiscal Deficit number be closely tracked?
Sahil Kapoor: Indian markets are trading beyond their long-term valuations. From large cap to microcap, as you move from higher to lower market capitalization, the valuations appear to rise.

This means that the smaller the company (by market cap), the higher the