Domestic markets continue to soar as indexes have seen strong interests from the FIIs and DIIs. Recently, the indication from RBI demonstrates that a rate cut is expected only in 1Q25 and this might act as a headwind. However, experts believe that equity market is likely to remain strong and this growth is expected to stem from banks, capital goods and autos moving forward.
On the other hand, inflation data from the United States exhibit that the US Fed might pause in September, which is expected to support global equity markets.
Indian stock market saw a significant rally in the past couple months and this was supported by positive economic winds by the United States, strong momentum in auto stocks, strong foreign inflows, stable inflation figures, and healthy growth in corporate earnings. Favourable economic indicators such as higher 1Q GDP, fall in the jobless claims, and successful stress tests which were conducted by the US Fed have reduced slowdown worries. Collectively, all these factors have supported in boosting the markets.
Market veteran, Mr. Vijay Kedia, a man holding more than 1% stake in over 15 listed firms, believes that the BSE Sensex is expected to climb 70,000-mark by the end of this calendar year. Foreign institutional investors (FII) decided to pour in INR1.21 lakh crore in domestic equity market so far since the start of this year. However, domestic institutional investors (DII) purchased shares worth INR87,491 crore in the same time period.
Given the current scenario, Mr. Vijay Kedia believes that long-term investors should invest their capital in sectors such as infrastructure and public sectors banks. According to him, infrastructure sector is expected to be supported by strong spending by Indian government and private sector. Capacity utilisation has touched 80%. Conversely, public sector banks tend to have cheap valuations and double-digit growth in credit.
Apart from these sectors, Mr. Kedia is a huge fan of telecom equipment-manufacturing companies. He explained that Indian government’s efforts to connect every corner of India and switch from 4G to 5G should be able to bring investment in the sector.
The BSE Capital Goods index saw the gains of 30% till August 7. BSE Realty, Healthcare, Auto and FMCG indices went up by 26%, 23%, 22% and 17%, respectively. Telecom, IT, Consumer Durables, Metals and Bankex grew by 4% – 9% so far. On the other hand, BSE Power and BSE Oil & Gas indices have fallen by 3% and 7%, respectively.
While market veteran seems quite optimistic about infrastructure and public sectors banks, he is bearish on information technology (IT) sector. This is because of the ongoing slowdown in the United States and the emergence of AI. He has advised investors to avoid investing in metal sector as this sector is dependent on global market.
Data available with Ace Equity exhibited that Mr. Kedia continuous to hold ~10% stake in Innovators Facade Systems as of June 30. Apart from this, this market veteran holds ~6.84% stake in Repro India, ~2.01% in Tejas Network and 1.95% in Vaibhav Global.
Earlier, in June, Mr. Vijay Kedia informed the market that he decided to buy 2 or 3 banks in the last year. These were Canara Bank, Federal Bank and BOB. However, he sold these stocks because of his weakness that he cannot hold on to liquid stocks. He mentioned that when he gets any sort of idea in midcap, which is illiquid, he is willing to sell liquid stocks which helps him to convert that money into mid-cap illiquid stocks. He uses such liquid stocks or large-cap stocks in the form of reserves. So, he decided to exit those stocks. Apart from this, movement of such stock was very slow- they tend to go by Rs 5 or they fall by Rs 4. Mr. Kedia is fond of investing in those stocks which goes up by Rs. 50 and down by Rs. 40 and then again, they rise Rs. 100 and fall by Rs 80.
In the recent interview, he highlighted the airline stocks. He informed the public that he likes airline industry and has invested in this industry. He said that he is invested in Indigo. However, he has specifically mentioned that he is not a consultant and he does not recommend stocks. His idea behind investing in this airline stock was that Indigo is the largest airline company and the most profitable company in this sector. He believes that what has never happened in 20, 30 or 50 years in this industry, will happen in the upcoming 5 years. As of now, his opinion is that airline industry has a strong growth potential despite of all the bad things and bad cash flow.
Some of the holdings of Mr. Vijay Kedia have delivered strong returns on the YTD basis. Mahindra Holidays & Resorts India Ltd. has delivered a return of ~26.4% on YTD basis, while stock price of Vaibhav Global Ltd. has gone up by ~26.04%. Stock price of Innovators Facade Systems Ltd. saw a phenomenal increase of ~127.9% on the YTD basis.
- Strong order book and quarterly results: Are these signs enough for this power stock to rally?
- Should you go long on this stock that delivered ~42% gain in 6 months? Let’s explore!
- 6 Best Stocks to Buy for Long-term Capital Appreciation
- US credit rating downgrade: How this has impacted stock market?