According to Jiten Parmar of Aurum Capital, sectors such as banking, cement, infrastructure, paper, sugar, power, and chemicals still offer reasonable valuations. He remains constructive on the medium to long-term prospects of the Indian economy, citing robust tax collections and the formalization of the economy. However, Parmar warns of immediate challenges including the global economic slowdown, rising crude prices, and adverse outcomes from upcoming state and general elections. He advises investors to focus on individual companies, their valuations, and growth prospects.
“We saw a good rally in the PSU banks. Earlier, private banks also led the entire banking stable as well as certain NBFCs also came to the fore. This correction and consolidation that we are seeing actually augurs very well for the health of the markets. The correction which is right now going on in our markets, is probably giving a lot of people who had missed the bus, an opportunity to buy the stocks they could not enter earlier. ”
Financial advisors recommend a small allocation to these segments as the drop in returns in case of a market collapse can be sharper. Also, it is best to keep insurance and investment needs separate and opt for systematic investment through the mutual fund route for investing in these categories