Model Portfolio Update: ICICI Direct

ICICI Direct Report

• CY21 has seen a strong economic recovery from the unlocked lows. The recovery in growth mainly stemmed from the government led initiatives by focusing on 'Atmanirbhar' schemes panning across a gamut of sectors, which, in turn, will act as a multiplier catalyst across layers of gross domestic product growth and get the economy back on fast track to achieve the $5 trillion aspiration.

• At the onset of CY22, a sea change is expected in the way business operates and transforms itself given the innovations in the digital and Tech world. From a market perspective, sectors that we are bullish on are IT, capital goods, auto ancillaries (EV exposure), retail and real estate.

• Midcaps, small caps gave stellar returns in CY21. This is expected to continue in CY22E driven by inherent business moats as the earnings compound annual growth rate for midcap, small cap in FY21-23E is expected at ~39%, 28%, respectively. Going forward, innovative themes present in the midcap and small cap space (like speciality steel chemicals, home textiles, contract research and manufacturing services, etc.), superior earning potential and reasonable valuations make us believe that more upsides are in store for investors.

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