Nilesh Shah, Managing Director (MD) at Kotak Mahindra AMC said that the current financial year is likely to be another volatile one. However, if global events come in favour of India, the markets will see positive returns. While there may be some volatility in the Indian equity market in the short-term, investors can find opportunities in sectors such as autos and cement, he told CNBC-TV18.
He added that it may be difficult to take a one-year call in equity market currently.
"I see a lot of volatility based on events. If these events turn out to be in favour of India, then certainly markets can deliver positive return, because since almost August 2021, markets have not given any return," Shah told CNBC-TV18.
Shah is positive on the auto space and believes that passenger vehicles are seeing a K-shaped recovery (when one sector of the economy rebounds from a recession, and another sector of the economy continues to decline during a recession). He also said that cooling commodity prices have not been passed on to consumers, which could be beneficial for companies in the space.
Another area that Shah is optimistic about is the cement industry. He believes that the focus on infra build-up, especially in an election year will benefit the sector.
Talking about earnings, he said that the September and December quarterly results were weak for most sectors barring the BFSI space. He is hoping to see a better quarter in terms of the outlook for rural recovery in the March 2023 quarter.
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When it comes to investing, Shah believes that the certainty of making money in debt is far higher. He also noted that rate cuts will only begin towards the end of 2023.
In terms of policy changes, Shah is hoping that the finance ministry takes the tax rate journey to a logical conclusion. He also wants to see the journey of creating a level playing field move forward.
On debt mutual funds, he said that it is easy to enter the Indian debt market but it is tough to get out. He was referring to the changes made in debt funds' taxation recently.
“We still believe debt mutual funds probably does not have tax advantage like before, but it continues to give you diversification for as small a sum of Rs 500. It gives professional management and most importantly it gives you any time," Shah added.
For more details, watch the accompanying video
(Edited by : Anshul)
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