Emkay Global's Top Investment Bets
Foreign fund inflows are driving Indian markets to new highs regularly, says Krishna Kumar Karwa.
The S&P BSE Sensex and NSE Nifty 50 are hitting record highs every day due to foreign fund inflows into the Indian markets, according to Emkay Global Financial Services Ltd.'s Managing Director Krishna Kumar Karwa.
Many global companies are either establishing their presence in India or increasing their investments in the country, Karwa told BQ Prime's Niraj Shah.
Top Pockets To Invest In
Banks
In the large-cap indices, aside from banking stocks, there are not many heavyweight stocks that can bolster them, said Karwa.
Investors seeking to capture more than just earnings growth in the stock price, may find potential in investment opportunities in certain public sector banks, rather than the widely recognised and established large-cap private banks, according to Karwa.
Non-banking financial institutions have delivered a strong performance, and Karwa is optimistic that the stocks will perform better in the upcoming quarter.
Nifty Bank rose 6.86% year-to-date, and Nifty Financial Services gained 8.03%, according to Bloomberg data.
Till the first-half of July, financial services experienced the highest inflows of $4,363 million, or Rs 35,792.5 crore, representing 31.63% of the total foreing fund flows so far in 2023.
Pharmaceuticals
"Some of the pharma companies have done really well. The supply chain and import pricing issues are all behind them," Karwa said. The comments from these pharmaceutical companies are notably positive, which investors have been anticipating, he said.
Domestic pharma companies are consistently performing well, and their business remains stable, according to Karwa.
Nifty Pharma rose 13.78% year-to-date, according to Bloomberg data.
Business-To-Government
The B2G space has been multi-bagger in the last two to two-and-a-half years, and the execution capabilities of these orders also need to be carefully looked into, Karwa said.
However, investors need to exercise caution and be fully aware of a crucial aspect, namely, the execution capabilities of these companies, he said.
While having a strong order book is essential, the ultimate determinant of success lies in how efficiently and profitably these orders are executed, he said.
"We are just giving a run through the stock prices based on order inflow. I think the execution capabilities also need to be carefully looked into."
Information Technology
The information and technology sector is still disappointing, or rather, it is a work-in-progress, he said. The stocks prices have not yet corrected in this spacee to attractive levels, Karwa said.
