‘Limited Upside For Old Favourites Cement, Steel And Infra Stocks’: Dimension Corporate’s Ajay Srivastava

Retail investors should opt to reassess their portfolios and book profits where appropriate, particularly as sectors like non-ferrous commodities, cement, steel and many infrastructure stocks have limited upside. Ajay Srivastava, MD, Dimension Corporate Finance Services, said on June 18.

Speaking to NDTV Profit, Srivastava cautioned that infrastructure spending by the government is unlikely to increase. “I think basic non-ferrous commodities aren't moving anytime soon. Old favourites like cement and steel won't deliver returns. Infrastructure stocks have run their course, as government spending there is clearly slowing. Railways flatter and then deceive. Consumer stocks, which have 100-plus PEs, are significantly risky,” he explained.

Despite global volatility and Foreign Institutional Investor (FII) selling, Indian markets have shown resilience due to strong domestic demand. According to Srivastava, with the RBI's recent repo rate cuts, equities are likely to become more attractive than traditional savings. However, he noted a potential shift of capital towards precious metals like gold and silver.

“On the demand-supply front, equity demand is rising and will likely rise further, especially if the RBI continues cutting interest rates, as returns on savings and fixed deposits will decline, pushing people toward alternatives. So, equity markets are resilient and have enormous demand potential. However, many investors missed the big rally in gold and silver. So, you may see large capital inflows into these precious metals,” he added.

He also warned that the current market valuations haven't adjusted despite global tensions and higher oil prices, urging investors to take some profits. When asked where he sees upcoming opportunities, Srivastava noted that instead of chasing traditional metrics like P/E ratios, his current investment strategy focuses on following private equity (PE) funds. 

When asked about potential opportunities in Indian markets, he suggested staying liquid and buying quality assets on market corrections.

“If it corrects, you buy hospital themes, medical care and medical devices. Engineering companies in India are extremely strong and globally competitive. Auto ancillary companies are very good, supplying the world. There are many new-age companies too—if you're not risk-averse, you can buy them. India isn't short on investment choices,” Srivastava added.

Meanwhile, benchmark Nifty 50 closed at 24,812.05, down 41.35 points, or 0.17%, on Wednesday, amid global uncertainties over the intensifying conflict between Iran and Israel. On the other hand, the BSE SENSEX ended 138.64 points, or 0.17% lower, at 81,444.66.