2024 is poised to be a stock pickers market, says Ambit Investment's Dhiraj Agarwal
Dhiraj Agarwal, Managing Director of Ambit Investment Managers, shared his continued interest in Zomato, stating that although he is not currently buying the stock, he believes it has a course to run.
Dhiraj Agarwal, Managing Director of Ambit Investment Managers, believes that 2024 is poised to be a stock pickers market, signaling the end of the easy run when everything was running. Sharing his insights with CNBC-TV18 on the upcoming trends in the market for the new year, Agarwal emphasised that markets will become more selective, requiring investors to carefully choose their stocks for optimal returns.
Agarwal also pointed out the weak sales growth in the last two quarters, hovering around the 5-7% range. He highlighted that the earnings growth of 27–28% is primarily driven by margin expansion, a benefit that is likely to fade away soon as the wholesale price index (WPI) has crashed. Agarwal stressed the need for revenue growth to pick up, indicating potential challenges in the coming months.
On the midcap space, Agarwal noted its boiling momentum over the past two years. However, he anticipates that this year will bring a process of separating the good from the bad and the not-so-good in the midcap segment.
In the David versus Goliath battle, smaller companies appear to be winning, with some growing revenue at a significantly higher pace than their larger counterparts.
On Bajaj Finance, Agarwal observed that despite the consumer finance company's commendable performance over the last three years, the stock's returns have been at a modest 10–11% per annum. This is a significant drop from the previous exorbitant 30–40% compound annual growth rate (CAGR).
The middle segment, in terms of stock price performance, is facing challenges with valuations not being attractive enough and growth not reaching the desired levels.
Agarwal emphasised the crucial aspect of whether the fiscal year 2025 (FY25) will witness a growth pickup compared to FY24 for IT companies.
Agarwal raised doubts about the expected growth in the IT sector for FY25, pointing to data suggesting a potential slowdown in the US economy and other parts of the world, making him lean towards the view that FY25 upgrades may not materialise, and valuations are not currently attractive enough.
On a positive note, Agarwal sees strong performance in the real estate sector, considering it a cyclical sector with a potential upcycle lasting four to six years. He expressed optimism, indicating that there might be more to come in the real estate space.
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Closing the interview, Agarwal shared his continued interest in Zomato, stating that although he is not currently buying the stock, he believes it has a course to run.
For more, watch the accompanying video
(Edited by : Ajay Vaishnav)
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