In an interview with ETMarkets, Singhal stated: “With earnings more likely to get well in CY25, the ache in small and midcaps could ease. A selective bottom-up strategy is essential—deal with high quality companies with robust steadiness sheets and sustainable progress,” Edited excerpts:
Thanks for taking the time. February was extremely unstable amid commerce warfare fears and FII promoting. What are your views?
Commerce warfare issues have endured since President Trump’s election, however the current market weak point is basically home.
Overvaluation, particularly in mid and small caps, and weak company earnings have weighed on sentiment. A slowdown in rural and concrete consumption, together with tightening credit score, has added to the stress.
Since peaking on Sept 24, Nifty50, Midcap, and Small Cap indices have corrected 14%, 18%, and 21%, respectively, with FIIs promoting $37 billion.Nevertheless, early indicators of restoration are rising—high-frequency information like electrical energy consumption and logistics present enchancment, RBI has begun easing financial circumstances, and authorities capex is choosing up post-elections.Whereas markets could stay subdued till March-end, the outlook seems to be higher thereafter.How important are commerce warfare fears, and what influence do you see on markets and sectors? Commerce tensions are actual however laborious to quantify at this stage. Trump is thought to make use of tariffs as a negotiation instrument, however the present situation is extra advanced—China’s tech rise and broader geopolitical frictions add uncertainty.
The ultimate influence relies on how these negotiations unfold. Buyers ought to deal with long-term fundamentals relatively than short-term volatility.
Do you see an earnings restoration in CY25?Sure, we anticipate earnings restoration in CY25, supported by (1) robust GDP progress, (2) improved inflation and financial outlook, and (3) a secure BoP and CAD.
The current slowdown was cyclical, pushed by credit score tightening and election-related fiscal moderation. Nevertheless, headwinds are reversing—authorities capex is rising, the speed minimize cycle is resuming (with one other minimize possible in April), and liquidity injections and up to date tax sops are in play. These elements ought to drive earnings progress within the coming quarters.
Small & midcaps are in a bear market. How ought to traders strategy this theme?Small and midcaps have been hit laborious—Nifty Smallcap 100 is down 21%, valuations stay above long-term averages, and earnings disappointments have led to downgrades.
FPI promoting, initially triggered by China’s stimulus and later by U.S. market energy, has exacerbated volatility.
That stated, macro circumstances are bettering—GDP progress stays robust, monetaryl coverage is easing, and extra price cuts are anticipated.
With earnings more likely to get well in CY25, the ache in small and midcaps could ease. A selective bottom-up strategy is essential—deal with high quality companies with robust steadiness sheets and sustainable progress.
The place are one of the best funding alternatives in 2025? How ought to traders choose shares buying and selling at a reduction?Market corrections are extra cyclical than structural, and H2FY25 ought to outperform H1FY25. The Union Finances 2025 has offered a fiscal increase, particularly with ₹1 trillion in revenue tax advantages.Inventory choice standards:
● Earnings visibility – Corporations with robust progress potential.● Valuation consolation – Shares buying and selling at affordable ranges.● Stability sheet energy – Low leverage, robust money flows.● Sectoral tailwinds – Industries poised for progress.
Key sectors to look at:
● Client-facing shares – Auto and discretionary sectors ought to profit from elevated disposable revenue and festive demand.● Capital items – Robust authorities capex and post-election restoration so as flows.● Cement – Optimistic working leverage, decrease gasoline prices, and margin growth.● Pharma & Healthcare – Sustained progress from new product launches and regulatory tailwinds.
India Inc. is well-positioned for a restoration, with FY26 anticipated to carry robust earnings progress.SIPs have hit ₹26K crore for 2 months in a row. Might they decelerate if markets lose momentum?SIP slowdown is at all times a danger. We should always take a look at web inflows into fairness mutual funds that proceed to stay robust, indicating resilient retail participation. For now, there’s no main concern a couple of tapering in SIP/fairness flows.
How do you view Gold & Silver investing in 2025?Gold thrives in uncertainty, and 2025 presents a number of tailwinds—commerce tensions, inflation issues, and central financial institution shopping for (particularly China). All this stuff together with anticipated U.S. price cuts makes Gold as an asset class fairly enticing. Main international banks venture gold costs round $3,100/oz by year-end. Silver, typically following gold, might see the same upside.
(Disclaimer: Suggestions, recommendations, views, and opinions given by specialists are their very own. These don’t symbolize the views of the Financial Occasions)
