Market in Samvat 2080: Key Themes, Sectors and Stock picks: Motilal Oswal Financial Services
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A note by Motilal Oswal Financial Services on Samvat 2080 recommends focussing on themes like financials, consumption, discretionary spending, Construction & Real Estate, and High Growth Niche Sectors like MFIs, Electronic Manufacturing, New Age FinTech stocks.
In the report, MOFSL expect financials especially PSU Banks and NBFCs to continue witnessing robust loan growth while expecting their asset quality remains healthy. Also valuations are reasonable especially after their recent underperformance.
Samvat 2080 is set to start with Multiple states going into election in November-December’2023, which would set the stage for General Election in May 2024. Historically, such scenario has resulted in a pre-election rally. In the last five consecutive Lok Sabha elections (i.e. from 1999 to 2019), Nifty has rallied 10-35% for the six months run-up until the announcement of election results (Nov-May period).
The report notes that various sectors in consumer discretionary – Auto, Hotels, Jewellery, real estate, Building Materials, etc. are seeing good demand which is likely to continue given India’s Strong economy and strong demographics. It believes, Indian corporate sector is well positioned to benefit from capex push, focus on indigenization, PLI schemes to strengthen the manufacturing base, strategic global technology tie ups, and focus on increasing exports.
MOFSL believes overall trend should remain positive in Samvat 2080 and is positive on Indian equities from mid to long term perspective, given the favorable domestic environment.
Outlook:
- Despite global uncertainties, India remains a shining star and is expected to maintain its outperformance.
- Nifty is trading at a 12-month forward P/E of 17.6x, which is at a 13% discount to its 10-year average, thus providing comfort.
- MOFSL believes that over the next couple of quarters, sector rotation could be an important driver along with the overall market uptrend.
- MOFSL also believes valuations will become an important factor in stock selection to drive outperformance in portfolios.
- MOFSL presents below our key themes and ideas for Samvat 2080.
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