ETMarkets Smart Talk- We see more value in large caps at this juncture from a 1–2-year perspective: Ashutosh Tiwari

economictimes.indiatimes.com:

“Midcaps operating in niche segments have done well, but considering valuations, we see more value in large caps at this juncture from a 1–2-year perspective,” says Ashutosh Tiwari, Managing Director & Head Institutional Equities at Equirus. In an interview with ETMarkets, Tiwari, said: “Avoid companies trading at high valuations and focus on those delivering good earnings growth and cash flows but trading at reasonable valuations. The margin of safety is more important right now” Edited excerpts:We have seen a dream run on D-St with Sensex hitting 67000 and Nifty50 heading towards the 20,000 marks. Is this too good to be true and we are running ahead of fundamentals? India has seen massive FII inflows from March to till date July of almost US$ 19.2bn vs net outflow of US$ 3.4bn in Jan-Feb and outflow of US$ 18.4bn in CY22.

It is one of the major reasons behind the sharp rally in markets. India’s fundamentals are good in terms of recovery in the manufacturing sector over the next few years driven by localization of imports and export opportunities emanating from China +1 as well shifts from Europe.

After this rally, valuations are now stretching a bit and markets might remain sideways over the next few months. Crude oil prices are still benign and have rallied 10-12% from April-May bottom; hence, one needs to be watchful of the same going ahead.What do you make of the Reliance demerger and entry of Jio Financial? Jio is well placed to scale up in financial services due to its huge database and connects with potential customers through its retail businesses.

With its strong balance sheet and parent, the cost of funds will be low for the company. It has the potential to become a good value creator over a longer period.Smal