Private Banks, IT And More: Emmer Capital’s Manishi Raychaudhuri Bets On These Stocks

The recent recovery in the stock markets has renewed the interest of investors in Indian equities after a phase of volatility, according to Manishi Raychaudhuri, chief executive officer of Emmer Capital Partners.

This can be an opportune time for investors to pick stocks for near-term and long-term gains, Raychaudhuri told NDTV Profit, adding he was bullish on three sectors particularly.

Talking about market recovery after a phase of heavy selloffs by foreign investors, Raychaudhuri said three segments could be "pockets of interest" for investors. The equity expert is bullish on IT, private banks and consumer discretionaries, like car and two-wheeler stocks.  

“If you look at both the short term and the long term, it's really the top rung private sector banks that are likely to gain market share significantly. Public sector banks still occupy about 65% to 70% of the Indian lending space, and that's clearly going to change going forward,” he said.

Indian IT players are also likely to gain from the strengthening dollar and the Republican Party's win in the US presidential polls, according to the top executive.

“As a consequence of the geopolitical changes that we are seeing and the Republican sweep, India, particularly some of the select group of Indian exporters, could turn out to be so-called winners in this environment. The US dollar has appreciated. That's also a short term tailwind for IT service companies,” he noted.

According to Raychaudhuri, the third area of interest for investors could be the consumer discretionaries, including auto and two-wheeler stocks.

“Autos over the long term and two-wheelers in the near term as we enter and cross the wedding season,” he suggested.  

“There's a degree of support to rural consumption that has also come through as a consequence of a good harvesting season and a good monsoon, which should play out over the next couple of quarters,” Raychaudhuri added.

“So those would be my pockets of possible outperformance, both over the longer term and the near term,” the market expert asserted.

Raychaudhuri also predicted that industrials and infrastructure could be another segment to watch out for in the long term.

“That is going to be a theme that would be multi-decadal for India. If India wants to transition to manufacturing and export, getting better infrastructure, there's really no alternative to it. I think the government is going exactly in that direction,” he said.

Investors would be "better off" buying some overvalued stocks at a lower valuation, he noted.

“There are some stocks which are overvalued. They have corrected a bit, but possibly investors would be better off buying them at lower valuation compared to where they are today. But, it's really a multi-decadal theme that we would continue to focus on,” he said.