Manish Sonthalia: Status quo on capital gains tax will boost investor confidence

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Edited excerpts of an interview: Given that the government holds a majority, I anticipate that the Budget session will proceed smoothly in terms of passing crucial bills. Over the next six months, at least, it seems likely that most bills will be passed without significant issues. The Finance Bill, in particular, is essential, and I expect it to pass without major obstacles.

While there may be debates and discussions in Parliament, I don't foresee any significant political logjam that would hinder the legislative process. Broadly speaking, I project that the Nifty 50 should see around 15% earnings growth for fiscal 2025. Key sectors leading this growth will likely include banks, IT, oil and gas, and metals.

These sectors are expected to drive significant earnings. While mid- and small-cap companies are more diversified, with some experiencing losses and others performing well, I anticipate that the overall earnings growth in these segments will be faster due to controlled inflation and robust economic conditions. However, the growth will not be uniform across all companies.

I am particularly bullish on sectors with strong earnings growth potential. PSUs are attractively valued relative to their growth prospects, especially those with monopolistic characteristics. The banking sector, including BFSI, particularly the insurance sector, is another area with promising earnings growth.

IT is expected to make a comeback in the second half of the fiscal year, looking strong going into 2026. Oil and gas, along with metals, also appear to be in a good position. On the other hand, I would avoid sectors where valuations are very high despite expected earnings growth.