Market on an uptrend, Rajat Rajgarhia highlights potential wealth creators

The Indian market has shown resilience, ending the year with significant gains in both the Nifty and mid-cap indexes. This, according to Rajat Rajgarhia, MD and CEO of Institutional Equities at Motilal Oswal Financial Services, is a healthy sign of a market that still has room for growth in the coming years.

"We are ending this year with almost 15-16% Nifty gain, 30% plus mid-cap gain, and maybe a large number of stocks, which have doubled this year," he told CNBC-TV18.

The expert, while acknowledging the recent fall, emphasised the importance of being stock-specific in investment choices, regardless of market levels. The key, according to him, is to focus on specific stocks that offer value, even in a market that has seen substantial overall growth.

He highlighted the financial sector as a major opportunity for wealth creation, pointing out that financial institutions are entering a growth cycle with strong balance sheets. He expects them to achieve new multiples in this cycle and recommends focusing on a diverse portfolio within the sector, including private banks, state-owned banks, NBFCs, insurance, capital markets, and wealth management firms. He specifically recommended ICICI Bank and State Bank of India (SBI) as the two best ideas in the space.

Rajgarhia also discussed the small cap space, advising caution with valuations but noting the potential for significant growth in companies with strong business opportunities. Renewable energy is an area of interest, especially given the government's focus and companies' improved balance sheet management.

Finally, he touched upon the travel and tourism industry, which he sees as a vibrant and booming sector. He believes that this industry will continue to thrive, driven by increasing domestic and international travel. He suggested focusing on the best brands within this space, as well as related ancillary businesses. Notable mentions included Indian Hotels at the top end and Lemon Tree in the mid-cap segment.

In the healthcare sector, Rajgarhia mentioned Medanta and Apollo Hospitals as noteworthy performers, indicating a positive outlook for these entities in the market.