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Time of India
04-08-2025
- Business
- Time of India
Take it one day at a time; not very bullish or very bearish at this point in time: Mihir Vora
Mihir Vora , CIO, Trust MF , suggests market sentiment is cautiously optimistic, noting a recent dollar recovery as a technical bounce, not a structural shift. While FII inflows into India are expected to continue barring uncertainties, domestic growth indicators, particularly banking credit, need to improve to support a 6.5% GDP growth expectation. We are still in a wait-and-watch mode but look at how much FIIs are selling India. We were looking at the data points. It has been quite an excruciating selloff. There has been five consecutive weeks of decline. It seems markets have digested both tariffs as well as earning softness back home. Mihir Vora: I would not say the markets have completely digested it because the markets have gone down in spite of local buying. I would say the sentiment is a little bit cautious, it is optimistic but cautious. What has also happened is that we did see some dollar recovery in the sense that the dollar had been continuously weakening since February, and in the last couple of weeks, we did see some dollar strength. 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Lulutox Undo It is more of a technical bounce, DXY is going from 96 to close to 100 but on Friday again, we saw that there was a correction. The dollar structurally continues to remain a weak currency. In general, as long as things are not too uncertain, we should continue to get money from FIIs into India barring these fluctuations. But the bigger issue is that certain domestic growth indicators are still not picking up to the extent that one would hope they will. For example, banking credit is one of the biggest indicators and we are still at almost a high single digit kind of a number which is not sustainable or not compatible with the expectation of a 6.5% GDP growth. We do need some of those indicators to pick up to get the confidence that the current assumption that the second half will be better has to pan out. Since the markets have not fully digested the overhangs we have, are we in store for some more consolidation or would it be the correct time to say that the markets have bottomed out and now we can head for some recovery? Mihir Vora: I would not call either a top or a bottom at this point in time. I would take it a day at a time because there are a lot of moving parts and tariffs is one of them. Some of the macro indicators of growth, etc, need to be monitored closely. We need some improvement there. We should take it one day at a time. I am not very bullish or very bearish at this point in time. Live Events You Might Also Like: Weaker dollar story taking a breather but more weakening possible in quarters ahead: BlackRock's Gargi Chaudhuri answers You did flag off the credit growth concerns when it comes to banks and one has seen that play out pretty much across the board wherein there are cases of high provisioning pretty much for all banks right now. How do you dissect it within banks? While large ones need to be part of your core portfolio, what about the bottom-up approach, the smaller ones? Mihir Vora: We are still sticking to the larger private sector banks though we have some exposure to PSUs, but not much. The call is that pricing power both on the asset side as well as the liability side tends to be a bit higher with the larger private sector banks. Of course, since they typically have a diversified portfolio, they may not be the fastest growing, but in terms of structural pricing power and liability management, the larger banks tend to be a bit stronger. As of now, we are sticking to the larger private sector banks. The US has imposed a tentative 25% tariff rate on India as we still do not know what the final figure could be. Amid such uncertainty, how have you rejigged your portfolio? Where are your current overweights and underweights? Mihir Vora: We have not really rejigged the portfolio based on the tariff situation because it is still a fluid situation and it is never over till it is over as with President Trump. Negotiations will go down to the wire, to the last day so to say. So, we are not taking big calls based on the tariff situation. But I would say that in the last few weeks, we have been mostly re-tweaking or readjusting the portfolio based on results. Based on results, we have reduced a bit of exposure to banking and IT where we were overweight to start with but have gone further overweight on the largecap IT stock based on the results. Most of the rejig has happened after looking at the results and the trends.
Time of India
17-07-2025
- Business
- Time of India
What sectors are going to have their day in the sun right now? Mihir Vora answers
Mihir Vora , CIO, Trust MF , says government spending continues to drive visibility in infrastructure, power, telecom, and defense sectors. Rural financing, particularly microfinance and small gold loans, shows promise due to government investment and economic recovery. While large-cap, FMCG, and IT sectors are avoided, domestic segments and consumer discretionary items, especially AC stocks, present selective value opportunities. There are earnings, there are tariffs and there are lots of moving parts to address in the market right now. Amid all of these factors that are at play, how are you viewing the market right now and where do you think we can still find some value? Mihir Vora : I would say the market is in a wait-and-watch mode because after the sharp correction in the first quarter, we have recovered very smartly, and we have recovered in spite of all the domestic and global events like tariffs, the border situation, etc. So, there are lots of moving parts and the market has sustained very well against all those odds. Now, we are at a stage where both the negatives and the positives are evenly balanced and evenly priced in and going forward, we will have to look forward to our own domestic fundamental growth which is something that we are very closely observing. 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So, the results season and the guidance that the companies give, as well as the next few data points on growth, especially credit growth are something that we are looking forward to now. At the same time, talking about the earning season, there were expectations from the IT basket. After TCS came up with the numbers, other IT majors will be coming up with their numbers, but the expectations are high for banks and financials. What is your take on the earning season? Will it be the banks and financials or the consumption bucket that will give the next direction to the market? Mihir Vora: As far as the large banks are concerned, we do not have extremely positive signals yet because a key variable, credit growth, is still tepid. Within banks and financials, we would look at the NBFCs, especially the retailing NBFCs which have a relatively higher proportion of a fixed rate book because funding cost is going to come down for everybody, but in the case of banks, a lot of the loans are floating rate so the asset repricing also happens a bit faster. Whereas for NBFCs, which have a fixed rate kind of a book, the asset repricing happens over a period of time. So, I would say that retail NBFCs, certain pockets of banks which are in niche segments like MSME or retail or gold or even microfinance, might show better margins and better growth. We have to be picky and choosy. Having said that, the markets cannot do well and the economy cannot do well unless the large banks kick off and in that case, the valuations are attractive for most of the large banks. No issues, balance sheet settling, but the only thing we need to watch out for is growth and right now, the default case is that the second half after the monsoons should see a pickup in growth and that is what we would start positioning ourselves for. Live Events You Might Also Like: For India, what RBI Guv is doing is far more important than what Trump is doing: Vikas Khemani In terms of a portfolio strategy right now, what is it that you are doing given that there are so many unknowns like we just talked about which are still up in the air, do you think doing nothing is the best strategy right now? Mihir Vora: Absolutely, as I said, since we are in a wait-and-watch mode, the market is in a consolidation mode because we do not have the absolute downside in valuations. Valuations are fair, probably a little above average. So, it is not like there are extremely cheap valuations to start with and at normal rates, you would need earnings to come back to normal rates. My guess is that it is going to be a stock pickers' market . For midcaps and smallcaps, at least from the last quarter's numbers, look to have a far better story out there and the sheer number of stocks is much larger in the mid and smallcap segment. Probably, in the next few months, it will be a very subsector specific, stock specific market. What sectors are going to find their day in the sun right now? Mihir Vora: The sectors in which there is visibility are still linked to government spending. The government spending does not seem to have come off. So, to that extent we will see that infra push, the power, telecom, defence push continue and we should see news flow in this segment to continue. So that is one segment where relatively speaking there is better visibility. In the retail financing space, there seems to be better visibility. Some pockets of rural financing like microfinance might be a play now because valuations have corrected, the government is spending a lot on the rural economy. The rural economy seems to be on the healing path so to say and microfinance is a direct beneficiary of that. You Might Also Like: Tariff situation isn't going to last for many more months as Trump can't afford a recession: Ed Yardeni So, microfinance and small gold loans segments can continue to do well. We might see some base effect in a lot of the capital good stocks because last year was a low base year and so that is a positive. There will be some base effect in the metals piece so there might be some pockets of value out there. It is really very picky and choosy. We are structurally underweight on largecap because as we discussed, it is a single-digit growth rate kind of an environment, for guidance also it is more or less according to that single digit, not very exciting. FMCG growth again is not very exciting. IT, FMCG, low growth utilities are the segments which we avoid. We are more positive on the domestic segments. Hopefully, consumer discretionary should also come back. Stocks have corrected a lot. Some of the AC stocks have corrected. They might offer some pockets of value. We are being choosy and picky about where the growth pockets are. Government spending as a theme is something you are liking at the moment but another theme that we are seeing showing some value right now is domestic demand focused themes in stocks, given the kind of tariff overhang that we have and we are in the wait and watch mode right now. What is your take on this entire domestic demand focused theme and some stocks that are servicing that theme? What do you like about this theme? Mihir Vora : Rural recovery is a theme. I would still wait for some more data points. It is still tentative. I would not say it is a full-blown recovery. It's the same for urban areas. We are getting mixed data points on urban unemployment. The visibility in consumption is still in the premium consumption category. So, wherever there is premiumisation or premium consumption, those categories are still showing some traction, like high-end retailing or jewellery or eating out and there it is a little more or less elastic, but in general, the lower-end consumption is still a question mark.
Time of India
17-07-2025
- Business
- Time of India
Equity fund launches slow down in 2025 amid stock market uncertainty
Live Events Agencies Mumbai: Equity fund launches by mutual funds experienced a slowdown in 2025, following a blockbuster 2024, as uncertainty over the stock market outlook and losses in many of last year's new fund offerings dimmed investor appetite for fresh products. In the first half of 2025, ending June 30, mutual funds launched 29 open-ended equity schemes, mobilising ₹12,543 crore as against 37 schemes that collected ₹38,655 crore in the same period of 2024 and 44 that garnered close to ₹56,000 crore in the second half of last year, as per Association of Mutual Funds in India moderation in new fund launches this year, compared to CY 2024, could be due to the equity markets being relatively flat for the last 12 months, with increased volatility in the last few months, said Suresh Soni, CEO, Baroda BNP Paribas Mutual Fund."We may see the number of new funds, especially from older fund houses, taper off as they have completed the themes and strategies that they wanted to offer to investors," he the entire year, 2024 witnessed 81 equity new fund offers (NFOs) led by thematic funds , collectively garnering ₹94,548 crore, riding the bullish wave in the stock market till funds raised record money from investors through new fund offers (NFOs) in segments like defence, tourism, capital markets, energy, manufacturing, innovation, transportation and logistics, automotive, internet economy, realty, and many others. As regulations prevent fund houses from operating more than one scheme in each equity category, the industry has found a way around the rule by launching schemes based on various themes. Moreover, various mutual funds launched schemes to reward distributors, who often push investors to shift from products that investors held for a while to new equity funds that charge higher returns of many sectoral and thematic funds swinging wildly after the sell-off between October and March and the subsequent rebound, investors have been unnerved by the volatility, resulting in their demand for new products going Bagla, CEO of Trust MF, attributed the fall in NFOs to geopolitical challenges in the first half of this year. "The markets had turned volatile at the beginning of the year, which dented investor sentiment for some time. Also, slowing growth and Trump tariffs slowed the flows down a bit."In January-March of 2025, mutual funds saw 20 schemes raise ₹7,853 crore, while April-June saw nine schemes collect ₹4,690 crore. Muted returns have also made fund houses hesitant to launch new schemes. According to Value Research, the large-cap equity funds category delivered only 5% returns in the first six months of 2025, while the large-and-mid-cap category returned just 1%.Bagla said investor interest is likely to revive soon with newer mutual funds starting operations."There will a spate of sectoral and thematic fund launches by newer mutual funds," he said. "However, I expect the current year's mobilisation numbers to be a tad less than last year's as the current equity performance is not as strong as last year's."
