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Business Recorder
23-05-2025
- Business
- Business Recorder
Indian equity benchmarks top Asian gainers, erase weekly losses
India's equity benchmarks rose on Friday to beat major Asian peers as easing U.S. Treasury yields lifted global investor sentiment. The NSE Nifty 50 rose 0.99% to 24,853.15, while the BSE Sensex gained 0.95% to 81,721.08, paring weekly losses. The Indian rupee posted its largest single-day gain in more than two years while the benchmark 10-year bond yield declined ahead of the central bank's surplus transfer to the government. 'Indian markets are likely moving ahead of fundamentals and reacting pre-emptively to the expected domestic rate cut on June 6,' said Vikas Gupta, CEO and chief investment strategist at OmniScience Capital. The Reserve Bank of India is expected to cut the policy rate for the third consecutive time on June 6 to support economic growth. Long-dated U.S. bond yields eased on Friday, with those on the 10-year note off 3.8 basis points to 4.51%. U.S. bond yields spiked earlier this week on concerns over a tax-cut bill that is expected to add $3.8 trillion to federal debt. Indian shares fall on US fiscal worries, rising Treasury yields The Republican-controlled U.S. House of Representatives passed the sweeping tax and spending bill, which now heads to the Senate for approval. Foreign investors sold Indian shares in three of the last four sessions. The Nifty and Sensex ended the week down about 0.7% each, after a 4% rally in the prior week. For the week, nine of the 13 major sectors logged losses. The broader small-caps rose 0.5% while mid-caps shed 0.7%. Bharat Electronics rose 5.5%, its seventh weekly gain, helped by upbeat analyst commentary and ahead of its addition to the Sensex. On the day, consumer stocks added 1.6%, aided by ITC after strong March-quarter earnings. The IT index, which lost 1.3% in the previous session, rose 1%. Pharma shares lost 0.4%, dragged by Sun Pharmaceutical on concerns over its weak revenue guidance for the fiscal year.
Mint
20-05-2025
- Business
- Mint
Banks, IT to defence: Dr Vikas Gupta of OmniScience Capital lists sectors that can turn wealth creators over 3-5 years
Dr. Vikas Gupta, CEO & Chief Investment Strategist at OmniScience Capital, believes several sectors in India are showing immense investment opportunities, with banking, IT, logistics, defence and power among others can emerge as wealth-creating sectors over the next few years. On the index level, he sees things aligning, with the reclusive earnings recovery possible this year. However, for index investors in mid and small-cap, he advised being careful as these indexes are overvalued. Edited excerpts: As the various factors causing uncertainty are settling down, the earnings growth remains the most important factor which determines the future market direction. We should ideally not focus on the earnings at the index level, but rather focus on specific sectors and their earnings growth. For example, for the Nifty 50, after financial services, IT, and oil & gas are the largest contributors. IT earnings could take some more time to recover. Oil & gas are heavily dependent on volatile global market prices of crude oil. So these kinds of pulls are making the Nifty 50 earnings growth slightly challenging. Despite this, we expect a double-digit earnings growth for the Nifty 50 this year. Possibly, second half onwards, we should start seeing some predictability. Irrespective of the headline-level index earnings, several industries are doing quite well and showing steady growth. The DII ownership increase reflects the consistent allocation via SIP and lump sum by Indian retail investors to mutual funds through ups and downs. The mutual fund inflows continued despite the markets falling from September 2024 to February 2025. During this period, the FIIs were selling and DIIs were buying, thus increasing the DII ownership relative to FIIs. The inflows to DII from Indian investors continue. However, now the FIIs have started coming back, and hence the markets are responding since both DIIs and FIIs are competing for investing in the markets, and thus the additional FII money is pulling the markets up. Eventually, if the FII money keeps flowing, they could start taking their ownership share higher. Nifty PSU Banks are trading at a PE of 7. This is extremely low and shows that PSU Banks might be available at strong discounts to their intrinsic values. In fact, according to the scientific investing framework, banks, especially PSU Banks, have strong balance sheets with low NPAs and unutilised lending capacity. As the lending capacity is utilised due to strong demand for capital from Government of India's capex in infrastructure, corporate capex requirements and household capital demand for housing and consumer durables, the return on equity of the banks should increase faster than the asset growth. Thus, driving strong earnings growth. A rerating of the PSU banks to even 10-15 PE on accelerating earnings should drive huge value in the investor portfolio. The risks would be a slower demand for capital. The risk of increasing NPAs seems low in the next couple of years. Our scientific investing framework has thrown up several promising growth vectors which could be wealth creators over the next 3-5 years. These are growth vectors which have double-digit expected growth rates over the next 5-10 years or more. However, these companies are available at large discounts to their intrinsic values. We already discussed PSU banks and banks in general. Banking on growth is one of our strongest, most promising themes. Second, we see a strong opportunity in the housing finance segment. Another strong growth vector is power. Besides these, we believe that logistics would be one of the unanticipated growth vectors. On IT, once the US economy settles down, we should expect gains from the AI-related demand. However, this could take a couple of years to manifest. We are also optimistic about seeing India emerge as a global manufacturing hub with Make in India. Also, we are excited about the commercial services space. Also, remember that defence, as highlighted by Operation Sindoor, is a multi-decadal theme for India but one has to be careful on the valuation front as far as defence companies are concerned and should be selective or broaden their investment universe to include other dimensions of defence beyond arms and ammunition to economic warfare, cyber security, strategic materials, logistics and supply chain etc. Another multi-decadal theme is Railways, with growth visibility for a long time. With the Indian large-cap space defined as the top 100 stocks and midcaps as the next 150 stocks, this is a relatively small universe to select stocks. On the other hand, there are 1000s of stocks in the small-cap space. Naturally, the probability of finding investment opportunities in the small-cap space is higher. However, as discussed earlier, banks and power companies are mostly large and midcaps. Housing finance, logistics, manufacturing, and commercial services are mostly small-caps. Railways and defence companies are across the capitalisation spectrum. Thus, today one can find opportunities in both large and small-caps. But we would caution index investors in mid and small-cap to be careful, as these indexes are overvalued. However, if one is creating an active portfolio, there are opportunities. But one must stay away from the popular companies and use a well-designed investment process similar to the Scientific Investing Framework that we follow. This helps safeguard our portfolios from capital destroyers (weak balance sheets/loss-making companies), capital eroders (companies with no moats) and capital imploders (overvalued companies). We are not too focused on the chemical sector since there is a strong dependency on crude oil, China and global demand-supply factors. These factors make it quite difficult to have confidence in their revenue and earnings growth. Currently, they are not on our radar. Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
Time of India
14-05-2025
- Business
- Time of India
Will China's trade charm clip Nifty's wings as FIIs may rethink India bet amid US truce?
Live Events (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel Just when the bulls were getting comfortable on Dalal Street , the dragon may be gearing up to breathe some fire. With nearly $2 billion of foreign institutional inflows flooding Indian equities since April, a fresh US-China tariff truce could flip the script. The specter of global peace in trade—once a balm for battered investors—might now drive them away from the safety of Indian shores and back into the arms of a newly seductive China 'The China-US deal may reduce the relative attractiveness of India,' analysts at CLSA warned, calling out the elephant in the room. 'It may dial back fears of a global trade war. A rise in these fears made India a hiding place and the second-best performing market since March.'While the news flows might point to a temporary reshuffling of capital, not everyone is buying the China comeback story. Dr. Vikas Gupta, CEO of OmniScience Capital and Smallcase manager, offers a sharp counter. 'The Chinese markets have not given any long-term returns to investors. For example, the MSCI China ETF (MCHI) is nearly flat from 2011 to today, despite massive GDP growth. This shows deeper issues in corporate value creation,' he said. 'There could be some short-term flows to gain from an upward blip, but long-term allocations to China are unlikely.'Gupta also flags China's economic rot: a bloated debt-to-GDP ratio, shrinking working-age population, and weak bank balance sheets—factors that will continue to give FIIs cold feet, even if tariffs others see some near-term sparkle in the Chinese pitch. Vivek Rajaraman, Head of Domestic Investment Advisory at Waterfield Advisors, concedes, 'From China's point of view, the economic recovery post stimulus and recent AI successes have increased their appeal. The truce may erode some advantages India gained under the China Plus One strategy. Hence, there may be some short term increase in FII flows to China.'But don't count out India just yet. 'India's structural growth story is intact,' Rajaraman added. 'FIIs have returned over the past few months, drawn by a stable currency and strong rally. Many Indian firms are in sectors insulated from China trade dynamics, like pharma and IT.'That said, the real battleground might be manufacturing—a crown jewel in India's policy push.'China is likely to regain cost competitiveness in electronics, textiles and to a lesser extent pharmaceutical APIs. Businesses like continuity and this trade deal will increase the costs of shifting from China to other nations. While some shift in electronics manufacturing to India has happened, India will have to rework its production, supply chain and logistics costs to remain competitive,' he Gupta, however, sees this as a controlled decoupling rather than a reversal. 'The US-China deal is about slowing down the shock from rearchitecting global supply chains,' he said. 'China+1 will continue. India will still be in the picture, especially with bilateral deals like the India-UK pact keeping export engines humming.'Bottom line? The truce may prompt some fast money to flirt with China, but India's long-game isn't in question—yet.: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
Hans India
14-05-2025
- Business
- Hans India
Indian industry to churn $3-trn biz potential by 2035
New Delhi: India's industry sector is expected to outpace agriculture to take a larger share in the GDP (30-32%) by 2035 and opening a $3 trillion opportunity, driven majorly by manufacturing, a report showed on Tuesday. Manufacturing is expected to emerge as the growth leader taking two-third share of industrials and more than 20 per cent share of the GDP by 2035. Higher domestic consumption with increasing per capita income and a target of $1 trillion merchandise exports are expected to drive this growth, according to the report by Omniscience Capital. The manufacturing sector is pivotal to India's economic growth, significantly contributing to the nation's GDP. Currently, it stands as one of India's key growth sectors, catering to both domestic and international markets. Government initiatives such as the Production-Linked Incentive (PLI) scheme, 'Make in India' campaign, liberalised Foreign Direct Investment (FDI) policy, public-private partnership (PPP) models for various public undertakings, and infrastructure development are fuelling this growth. To achieve India's ambitious $1 trillion merchandise export target by 2030, the merchandise exports should increase from the current $450 billion to $1 trillion, requiring a year-on-year growth rate of 12 per cent, the report mentioned. India's share in global merchandise exports has doubled from 0.9 per cent share in 2005 to 1.8 per cent in 2023. India's merchandise exports have grown at a 3-year CAGR of 18.8 per cent from FY21 to FY24 and a 5-year CAGR of 9.4 per cent from FY19 to FY24. 'India is poised to continue emerging as a preferred destination for manufacturing investments due to the availability of raw materials, low labour costs, a favourable corporate tax rate for manufacturing, and proactive government support through incentives,' said Ashwini Shami, EVP and Portfolio Manager at OmniScience Capital. The government is developing 11 industrial corridor projects under the National Industrial Corridor Development Programme (NICDP) across the country in four phases.
Economic Times
07-05-2025
- Business
- Economic Times
Defence stocks surge 50% in a month. 'Operation Sindoor' type tactical buy or overkill?
Following the successful 'Operation Sindoor,' Indian defence stocks have surged, attracting significant investor attention. Experts advise caution against impulsive buying, emphasizing a strategic approach due to potentially inflated valuations after the recent rally. Mutual funds increased holdings in several defence stocks, indicating long-term confidence, while FIIs also raised their stakes in specific companies. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads The successful launch of ' Operation Sindoor ' in the early hours of Wednesday has once again turned the spotlight on Indian defence stocks , which have rallied nearly 50% over the past month, reflecting strong investor interest. However, experts caution against chasing the rally out of FOMO, stressing the importance of a selective, strategy-driven approach to stock picking in this space.'Long-term investors should keep a watchlist of stocks or sectors they are looking at, to allocate capital to. There is no need to hurry or get into a panic mode or FOMO mode,' Vikas Gupta, CEO & Chief Investment Strategist at OmniScience Capital, acknowledged the focus 'naturally' getting back on the defence stocks following India's avenging of the Pahalgam attack. He said that the defence companies have large order books, which will get even larger along with the urgency to execute orders. The move is likely to boost revenues and earnings and could start reflecting within the 1-3 years a similar sentiment, market expert Nischal Maheshwari has asked investors to be cautious as the stocks may now look expensive following the recent rally. Maheshwari said that the recent trade in defence stocks has been on account of the geopolitical situation."Having said that, last especially in March, there were a lot of orders which have gone out to all these companies and that is also getting reflected. These stocks had underperformed for some time initially, and sort of a catch-up game, but at these prices, once again, the valuations are going to now start looking pretty expensive for most of them. So, you need to be cautious. Yes, it is a good trade, but for long-term buying this is not the point," he stocks have rallied up to 50% over the past one month with Paras Defence and Space Technologies topping the chart. Stocks like Data Patterns, DCX Systems Astra Microwave Products , Solar Industries India and Mazagon Dock Shipbuilders have delivered between 35% and 21% returns in this from Mazagon, other PSU stocks like Mishra Dhatu Nigam , Garden Reach Shipbuilders & Engineers, Bharat Dynamics BEML and Hindustan Aeronautics Limited (HAL) have also given double-digit returns in the same the index level, the Nifty Defence Index has jumped 16% and is among the best-performing ETMarkets analysis also showed heightened investor interest in defence stocks existing throughout this year, with mutual funds increasing their holdings in 11 out of 18 stocks within the Nifty India Defence Index in the March ended quarter, signalling growing institutional confidence in the sector's long-term top mutual fund buy in the quarter that ended on March 31, 2025 was BEML where MFs raised their holdings by 1.6% over the December quarter. The next in line were Solar Industries India, MTAR Technologies and Zen Technologies which saw a hike of 1.2%, 0.96% and 0.65%, Astra Microwave, Mishra Dhatu Nigam, BDL, Mazagon Dock, Paras Defence, Dynamatic Technologies and GRSE were among stocks which witnessed a rise in holdings of the foreign institutional investors (FIIs).(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
