Fund Manager Talk | Axis Mutual Fund’s Shreyash Devalkar spots 10 investing themes for H1 2025
IT, pharma, quick commerce, capital market beneficiaries, travel / tourism, renewable capex, power T&D, EMS, defence and select auto with visibility on new product launches, are the themes to look forward to for H1 2025, says Shreyash Devalkar, Head of Equity at Axis Mutual Fund.
However, he said in most of them valuations are high and hence by H2 2025, markets may look forward to evaluating potential triggers in underperformed sectors like lenders, FMCG and IT.
Edited excerpts from a chat:
The market's mood from bullish to bearish changes very quickly as we saw during the peak in September-end and then the rally which followed from the November lows. At this stage, how bullish or bearish are you?
Change in market emotions is a function of earning growth and absolute valuation. Though headline valuations at market level are high, the segments with relatively less earning growth like FMCG, Lenders, Energy, Metal are not expensive compared to their Pre-Covid valuations, while segments with relatively high earning growth like Real estate, Pharma, Auto, Capital Goods, most B2B businesses with less free cash flows are at higher valuation compared to their pre-Covid valuations. Hence, we expect segments with high valuations to undergo consolidation in the near term, if it lacks new earning growth triggers. While we continue to find opportunities across the markets, we believe individual stock picking will be important in this market.
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