ETMarkets Smart Talk: IT, Healthcare among top 4 sectors to drive next leg of the rally: Aditya Sood
“We expect sectors such as 1)IT, 2)Healthcare, 3)Manufacturing, and 4)Consumer Discretionary to drive the next leg of the rally, given their attractive valuations and strong fundamentals,” says Aditya Sood, Fund Manager- InCred Asset Management.
In an interview with ETMarkets, Sood said: “We expect a mixed bag of earnings for the rest of the financial year; with the automobile and financials expected to perform resiliently, the earnings of cement and consumer companies are expected to be under pressure” Edited excerpts:
What a week for Indian markets – 20,000 and then some profit taking in the week gone by. How are you looking at markets?
At the current levels, we believe the markets are fairly valued and foresee limited scope for multiple expansions in the short term.
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Offering CollegeCourseWebsiteIndian School of BusinessISB Chief Digital OfficerVisitIndian School of BusinessISB Chief Technology OfficerVisitIIM LucknowIIML Chief Marketing Officer ProgrammeVisitIncrementally, the returns exhibited will be a function of the earnings growth trajectory. Between the financial years 2021 to 2023, we have witnessed consolidation in the markets.
With the Nifty surpassing 20,000, the index’s TTM Price-to-Earnings ratio stands at 21.8x, higher than its two-year average but still below 26, which is its five-year average[Motilal Oswal data].
Further, regarding valuations, the Nifty is currently trading at a 12-month forward P/E of 18.3x and a 12-month forward price-to-book value of 2.9x.
One would need to take cognisance that we are heading into the election year, which will act as a major cue. In emerging markets like India, election cycles are important from economic
