Latest news with #ShreyashDevalkar
Time of India
4 days ago
- Business
- Time of India
Valuations higher than what growth warrants; pick stocks carefully in this market: Shreyash Devalkar
Shreyash Devalkar , Fund Manager, Axis Mutual Fund , recent GDP growth numbers for FY25 and Q4 met expectations. US flows are aiding the market. Despite lower volume growth, valuations are high. The IT sector's growth and PE ratio trends are an example. Globally, IT service valuations have shifted due to higher cash flows. Current valuations exceed what growth justifies. Careful stock picking is essential in this market. Indian markets have had a strong. Will this party continue and if yes, why and if no, why not? Shreyash Devalkar: You have been highlighting one point which is true as far as overall markets are concerned – good macro, in which there is low interest rate, low commodity prices, and fiscal deficit in control. The recent GDP growth numbers released for FY25 and Q4, have not shown much deviations from the expectations though the numbers are not what the market expected a year ago. But as of now, there is no deviation. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Una inversión en Amazon podría darte un salario extra. Undo So, broadly, combining all these factors we see definitely the flows from the US are there and that is definitely helping the market. And despite relatively lower growth on the volume front especially, the valuations are definitely high. I always give an example of the IT sector. In the first decade of this century, the IT sector used to grow at 15% with around 20-25 PE. In the second decade, it grew at around 10% with 15-20 PE, and now it is growing at around 5% with around 20 PE. So, the growth is low and the valuations are definitely higher than expected. Some of these valuations are not only in India and if you see IT services globally and take similar companies like Accenture in the US, there also they have seen some changes in valuation, the most appropriate reason is actually over the last three decades, the higher cash flows and higher payouts which this sector has witnessed. But broadly for various reasons, we can try to attribute one thing or other for every sector per se. Valuations are now higher than what the growth would warrant. So, one needs to be very careful in terms of stock picking in this kind of market. Is it okay to say that the macros are looking much better than the micros. Will that be a fair statement? The rupee has stopped falling. Inflation is coming under control as are bond yields. There has been an early onset of monsoon. Are we in for macro dominated rather than micro dominated trade now? Live Events You Might Also Like: Can India become the services factory of the world? Gautam Trivedi explains Shreyash Devalkar: Yes, this has been the case probably for one year to one-and-a-half years. Just one year ago, this trade had started because over last year we saw earnings cut and since September of 2024, the market started reacting to the micro numbers. If you remove even Trump trade related fall, before that also, there was a substantial fall and that was micro related. So, let us not totally ignore the micro and earnings growth. This phase has been a reminder of that and that is where on a one-year basis and so on, the returns as such are not as lucrative as one would like to have. So, definitely macro is good and it provides some downside protection to the market, but micro would be important to make money in individual stocks. We just concluded the Q4 earning season. Help us understand what were your key takeaways from the earning season? Other than that, which sectors do you believe offer an opportunity for long-term investors? Have you spotted any standout sector? Shreyash Devalkar: As far as the season is concerned, it was good versus expectations. What is happening currently is that since the last two-three quarters, the earnings are getting cut ahead of the earning season and expectations are getting revised downward prior to the earning season. So, generally, the earning season is not seeing as much cut as far as the period of approaching the earning season and that is why you have seen that not much reaction to the earning disappointment during the earning season per se. The stocks actually fell, as I said, from September onwards itself. If you take the largecaps represented by Nifty 50, then the growth has been less than 5% overall, while the broader market growth has been around 8%. Good growth in the context of valuation, has been in financial services in the last quarter in terms of NIMs versus expectation. Growth as well as asset quality have been good in some of the oil marketing companies, and the frontline capital goods companies as well. Only a part of the margin is where the focus is on the market especially when it comes to the capital goods and auto kind of cyclical sectors. Otherwise, the earnings are broadly in line with expectations. Since earnings are getting cut for the last three-four quarters ahead of the earning season, I see that FY26 earnings may not see further cuts beyond a point because the market has tried to factor in the recent trends in the earnings in FY26 as well. FY27 is where the entire bulge is when it comes to the earning growth expectation. As far as near-term earning cuts are concerned, we are broadly there. You Might Also Like: Top Nifty50 stocks analysts suggest buying in this volatile week What in this market is cheap but not good and what is good and yet cheap? Shreyash Devalkar: That part has been the case again for the last eight months or one year or so. So, the largecap of India mostly if you take bank, FMCG, IT, largest companies some of them, point is that since they are so large their growth is very much dependent on GDP growth and at 6-7% GDP growth whatever are the numbers for that and if there is expectation of the GDP growth further improving from here, with that expectation definitely the largecaps are reasonably valued compared to their growth expectation. If GDP growth accelerates, then largecaps can give better risk-adjusted returns. When it comes to mid and smallcaps, this conundrum has been there for the last three years now. It is not today's conundrum that largecap lacks growth while valuations are reasonable and midcap, smallcap the growths are better than the largecap but valuations have got elevated quarter after quarter. A 20 PE mid, small great growth story, became 30, 40 after every quarterly result season. Even in this quarter, the same thing would have happened and initially largecaps outperformed. But post the result season, many of the mid and smallcaps because of the good earning growth delivery have caught up. As an investor, if I am running a diversified portfolio, we are looking at a mix of both. So, just for the sake of reasonable valuations, one need not be entirely in the low growth segment. At the same time, one should not totally ignore some of the companies where the valuations are high, but the growth stories are intact. So, reasonable valuation is what we are looking forward to in our diversified funds. You Might Also Like: Stocks to buy today: Paytm, Swiggy among top 5 trading ideas for 2 June 2025
Time of India
26-05-2025
- Business
- Time of India
Axis Mutual Fund announces change in name of 2 equity funds
Axis Mutual Fund has announced the change in the name of two equity funds - Axis Bluechip Fund and Axis Growth Opportunities Fund . Axis Bluechip Fund will be known as Axis Large Cap Fund , whereas Axis Growth Opportunities Fund will be known as Axis Large & Mid Cap Fund . Also Read | Nifty still below peak, but why are these mutual funds at record-high NAVs? Play Video Pause Skip Backward Skip Forward Unmute Current Time 0:00 / Duration 0:00 Loaded : 0% 0:00 Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 1x Playback Rate Chapters Chapters Descriptions descriptions off , selected Captions captions settings , opens captions settings dialog captions off , selected Audio Track Picture-in-Picture Fullscreen This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Text Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Transparent Caption Area Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Drop shadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Best MF to invest Looking for the best mutual funds to invest? Here are our recommendations. View Details » by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Play War Thunder now for free War Thunder Play Now Undo The fund house informed about these changes to the unitholders through a notice cum addendum. The changes will be effective from June 2. 'All references to the existing names appearing at all relevant places shall stand replaced with the revised names from the effective date, ' the addendum mentioned Live Events 'All other terms and conditions of the SID / KIM of the aforesaid Schemes and SAI of the fund remain unchanged. This addendum forms an integral part of the SID / KIM of the aforesaid Scheme and SAI of the fund, as amended from time to time, the addendum added. Axis Bluechip Fund is an open-ended equity scheme predominantly investing in largecap stocks. The scheme is benchmarked against BSE 100 TRI and is managed by Shreyash Devalkar, Jayesh Sundar, and Krishnaa Narayan. Also Read | 30 equity mutual funds multiply lumpsum investments by over 2 times in 3 years Axis Growth Opportunities Fund is an open-ended equity scheme investing in both largecap and midcap stocks. The scheme is benchmarked against Nifty Large Midcap 250 TRI and is managed by Shreyash Devalkar, Hitesh Das, and Krishnaa N. Axis Bluechip Fund had an AUM of Rs 33,218 crore and Axis Growth Opportunities Fund had an AUM of Rs 13,755 crore as on April 30, 2025.
Reuters
23-04-2025
- Business
- Reuters
Top Indian funds bet on domestic sectors to lead market rebound amid global jitters
April 23 (Reuters) - India's top investment funds are pivoting inward, betting on the resilience of the domestic economy and a rebound in corporate earnings, while retreating from export-driven bets amid escalating global trade tensions. The NSE Nifty 50 index (.NSEI), opens new tab recovered from a tariff-driven slump earlier this month, turning positive for 2025 with a nearly 8% jump in just two weeks. However, it remains 8% below the record highs of September 27, weighed by muted earnings, record foreign outflows, and ongoing trade tensions. As global uncertainty persists, multiple fund managers said they remain cautious on sectors such as information technology, energy and commodities due to their exposure to global economic growth. Instead, fund houses are focusing capital on sectors seen as safer plays offering growth with less volatility. "We are focusing on companies with lower exposure to global trade risks, which are available in financials, consumer staples, consumer discretionary, defence and healthcare sectors," said Sanjay Bembalkar, head of equity at Union Asset Management Company, which manages $3.5 billion in assets. Financials (.NIFTYFIN), opens new tab have led the Nifty rally in 2025, rising more than 12% on expectations of further monetary easing and liquidity injections by the central bank. Consumer stocks (.NIFTYFMCG), opens new tab, hit hard earlier this year, have surged about 13% since the start of March, with fund managers expecting the government's income tax cuts and the Reserve Bank of India's rate reductions to boost demand. Consumer heavyweights such as Hindustan Unilever ( opens new tab, ITC ( opens new tab, and Nestle ( opens new tab gained between 9% and 11% since the beginning of March and were among the top gainers in benchmark indexes over the period. "Accordingly, we have increased exposure to retail, pharma, and financials over the last six months," said Shreyash Devalkar, Head – Equity at Axis Mutual Fund, which manages about $150 billion across 16 schemes. "Relatively low-growth, substantially redacted sectors might do well," he added. LARGE-CAP APPEAL India's goods exports have slowed in recent months, reflecting weaker industrial activity. Services exports have also faltered, with February and March posting declines. The ongoing U.S.-China trade war continues to heighten global economic fears, despite a temporary pause in tariffs. With markets expected to remain volatile, fund houses are preferring to stick to large-cap stocks. Small- (.NIFSMCP100), opens new tab and mid-caps (.NIFMDCP100), opens new tab have gained about 15% and 13.5%, respectively, since the beginning of March, but they are still trading 14.5% and 10% below their record high levels. "Large-caps are relatively more appealing than they were in September 2024, and opting for large-caps mutual funds is a prudent strategy," said S Naren of ICICI Prudential AMC, which manages assets worth about $210 billion. Life Insurance Corporation (LIC) Mutual Fund, managing assets worth about $5 billion, says the fund has turned more constructive on large-cap financials, capital goods, and infrastructure-linked firms. "This isn't a market where you can go all in, but it's a good time to start nibbling selectively," said co-CIO Nikhil Rungta. He noted the fund has maintained a 3%-4.5% cash buffer across portfolios to take advantage of market dips. Despite the lingering risks due to tariffs and potential global growth slowdown, India is well-positioned since it is largely a domestic-driven economy, according to Naren. ($1 = 85.4050 Indian rupees)
