SMC Private Wealth: ETMarkets Fund Manager Discussion: SMC Private Wealth 5 High Confidence Buys for Next Year | Job Binary

Backing India’s growth story, SMC Private Wealth is betting big on mid-cap stocks in the diagnostics, apparel and construction sectors.

In an interview with ETMarkets, Ayush Aggarwalchief investment officer SMC Private Wealth, said the structural reforms introduced by the Indian government have helped India become one of the fastest growing countries in the world and given a much-needed boost to the domestic economy. There is a portfolio management services firm (PMS).

, and Rupa & Co in its equity portfolio. Between capital letters it grows. Edited excerpts:

Despite the global uncertainty, things seem to be bullish in the Indian market. What is your view on India?
I’m definitely on the up side.

Aggressive and synchronized monetary tightening by central banks around the world has undoubtedly further weakened the global economic outlook.

However, the introduction of structural reforms introduced by the central bank and the central government in the country continues to provide the necessary impetus to the economy.

It is clear that some high-frequency indicators such as GST revenues, auto sales and PMI are improving continuously. Even credit growth remains strong.

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Thus, with India emerging as one of the fastest growing countries in the world with a steady rise in GDP growth rate compared to other economies, India is expected to shine among its peers and always remain a favorite investment destination. for foreign players.

In this case, what are the factors that keep India above its peers?
India continues to hold a premium among its peers as the Narendra Modi government’s initiatives over the past eight years have paid off, as evidenced by high frequency figures and ever-increasing volumes of FDI inflows setting new records.

Additionally, India is seen as an emerging manufacturing hub in the global value chain, a growing consumer market and a global leader in digital transformation for government and the private sector.

India’s young population, its demographic dividend, will enable India to become a global manufacturing hub as well as a major consumer of goods and services.

India will continue to benefit from the China+1 strategy. Even in India, corporate governance practices are improving and there is transparency in our system.

But do you foresee any downside risks for Indian stocks in the coming year?
Weakening global macroeconomic conditions, recession fears and geopolitical conditions are major concerns for domestic markets.

Recession fears point to a subdued backdrop for global risk assets, and the global outlook remains unusually uncertain.

Rising crude oil prices will further fuel domestic inflation. The biggest downside risk for domestic markets is a hasty policy change by central banks (worldwide) to quell rising inflation.

Can you list five stocks that are “high conviction buys” over the next year?

We would like to list 5 stocks below. Disclaimer that we have positions in the following stocks through our PMS.

HDFC Bank: It reported strong performance in Q2. Asset quality has improved with the decline in restructured loans.

Krishna’s diagnosis: It is one of the largest differentiated diagnostic service providers in India. Management expects to grow revenue by 2x and net profit by 3x in the next 3 years and believes it will achieve 25% + RoCE (return on working capital) next year.

Rupa & Co: One of the leading and largest knitwear brands in India. Rupa is expected to grow strongly due to expansion of distribution, export penetration and focus on premium categories.

PSP Projects: One of the prominent contractors offering a diversified range of construction and related services. His focus is on industrial, institutional, government, public housing and residential projects.

Embassy REIT: Management expects office demand to benefit from higher request for proposals (RFP) given the talent pool, well-established ecosystem and concentration of players.

In your opinion, which sectors are likely to underperform in the coming year?

When it comes to the underperforming sector for the year ahead, I think of sectors like pharmaceuticals, oil and gas and mid-tier IT.

There is no big picture for the on-demand pharma sector. Pricing pressure in the US market, rising raw material costs, regulatory headwinds, uneven growth of several segments in the Indian market will continue to pressure the sector.

For the oil and gas sector, the threat of a global recession could dampen demand. Further rupee depreciation at home could act as a margin headwind for the sector.

Midcap IT remains under pressure amid global downturn. If we look at the order book or the order wins of most of the mid-sized IT companies, we can see that the demand has slowed down a bit.

(Disclaimer: Suggestions, recommendations, views and opinions of experts are their own. It does not represent the opinion of Economic Times)

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