Valuations in the largecap IT space remain expensive against their pre-COVID levels and the big names are still a few quarters away from turning a corner, says Hemang Kapasi.
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Despite selling by mutual funds and foreign investors, Allcargo Terminals, PC Jeweller, and MSTC saw significant returns in the last quarter. Allcargo Terminals stock hit a lifetime high with 102% returns and a decrease in mutual fund holding from 1.30% to 0.55% and FII holding from 8.22% to 7.61%. PC Jeweller gave 123% returns with MFs exiting the company and FIIs reducing their holding.
Hemang Kapasi recommends clients to shift exposure to largecaps and invest in sectors with structural uptrends due to potential volatility closer to the general elections. He advises staying invested in sectors that create long-term wealth, such as healthcare and consumption. India is expected to take a breather compared to other emerging markets before continuing its advance. The interim budget may include infrastructure and power sector-related capex announcements, as well as populist rural-centric measures
In 2023, the Indian stock market initially faced a downtrend but later experienced a significant rally, with Nifty achieving an year-to-date return of +18%.