Somnath Mukherjee emphasizes caution in the India market, focusing on growth aspects over undervaluation. Elevated valuations and geopolitical risks warrant careful monitoring. Investor maturity shown through doubling MF folios. Rupee depreciation affects Indian corporate balance sheets. Mukherjee says higher imported commodity prices could magnify via Fx and blunt margin expansion.
Somnath Mukherjee of ASK Private Wealth predicts promising market segments like cyclicals, commodities, capex. He foresees strong FII flows post US rate cuts, emphasizing sectoral allocation for high-risk investors in FY25. Mukherjee says: "With consumption remaining anemic and public capex being the primary driver of the economy, broad-based earnings momentum is likely to be slower than in the last 2-3 years."
The froth in the small and midcap (SMID) space is limited to a few pockets, but regulatory scrutiny could lead to sustained volatility, observe India s top-drawer wealth managers.
They add that they have been advising clients to reduce their exposure to smallcaps.
Anand Rathi Wealth, which manages investor wealth through mutual funds (MFs), reports that its exposure to smallcap stocks, both through MFs and directly, has decreased by nearly 7 percentage points in the past few months, now standing at 23 per cent.