'Not Business As Usual' — Avendus Capital's Andrew Holland Warns Of A Tough Road Ahead In 2025
Despite his cautious view for 2025, Andrew Holland sees pockets of opportunity in sectors like hospitality, travel and electronics.
As the year inches closer to an end, Andrew Holland, chief executive officer of Avendus Capital Public Markets Alternate Strategies, has a sobering message for investors: brace for volatility. "It's not business as usual," Holland said, while speaking to NDTV Profit.
Holland has flagged the upcoming earnings season as a critical pressure point. "Earnings growth for the next fiscal could fall between 5-10%," he noted, dampening hopes of any near-term catalysts for the market.
Holland also isn't optimistic about the Union Budget's ability to buoy the economy. "I don't think the budget is going to save us," he stated. Instead, he recommends a cautious approach, suggesting that holding cash going into 2025 may not be a bad strategy.
While Holland paints a cautious macroeconomic picture, he sees pockets of opportunity, particularly in consumption-driven sectors.
Premiumisation is a strong trend in the beverages sector, he noted, while stating that he is bullish in this case. With millennials prioritising experiences over possessions, Holland expects the travel and hospitality sectors to thrive.
Riding on government incentives and rising demand for locally made electronics, the electronic manufacturing sector is poised for long-term growth, he noted. Companies catering to millennials, he believes, are well-positioned to capitalise on these emerging trends.
Holland is long on new-age tech companies, confident in their potential to scale profitability as they mature, and short on FMCG, citing growth headwinds and margin pressures.
While paints have long been a darling of the Indian stock market, rising competition in the sector has made Holland wary. "There's too much competition; I'm nervous about it." Similarly, metals don’t inspire confidence in him, with Holland predicting a downward trend in prices.
The calendar years 2023 and 2024 saw a wave of initial public offerings, some massively oversubscribed, whereas others disappointing in their debut. Holland cautions investors against blindly chasing the IPO buzz. "Not all IPOs will do well, so invest carefully," he advised.
Holland emphasised the importance of a selective, and sector-specific investment strategy. "It's going to be more of a sector and stock-picking thing," he said.
