It's time for Indian investors to turn stock specific, to recalibrate and sharpen their focus, believes Ajay Srivastava, managing director at Dimension Corporate Finance Services Pvt. Ltd.
Srivastava mentioned that their portfolio isn't sitting on cash but is instead positioned with 33% exposure to transmission REITs and gilt funds.
Gilt funds are debt funds that invest solely in bonds and securities with fixed interests, which are issued by the state and central governments.
"When interest rate comes down you will book capital gains in the gilt funds," Srivastava told NDTV Profit, adding that this combination of interest income and capital gains will "definitely offer more than fixed deposits, and may even surpass Nifty or Bank Nifty returns."
On the sectoral front, Srivastava has exited the Indian pharma sector almost entirely. "What happens when you don't innovate and don't invest— that will be the story of Indian pharmaceuticals," he said.
Instead, his optimism lies in the hospital industry, which he called "the greatest domestic story." The sector's defensibility and continued relevance makes it one of the most profitable, he said. "Can't replace it, recreate it, everyone needs it."
Another key sector he highlighted was the emergence of India as a dominant global auto player. "India is today one of the most compelling auto stories of the world. The whole ecosystem of India is geared to be the world's supplier of auto," Srivastava said.
India is today one of the most compelling auto stories of the world.Ajay Srivastava
Meanwhile, quick commerce has hit a valuation ceiling, in his view. "Barriers to entry for quick commerce like Zomato, Swiggy are next to nothing. Competition is growing. The story is well valued and factored in at this point of time," he said, adding that India's consumption story is largely a Tier 1 and Tier 2 play. "People don't have money to even feed themselves in Tier 3 cities. Food delivery and movies are out of the question."
Among financials, Srivastava sees promise in a few top players. "Top 2-3 banks offer banking, insurance, broking and a lot of services, and are a good bet. Rest of banking sector, I doubt it," he said.
Lastly, Srivastava believes India's telecom sector is now a "monopoly story" with just two players controlling access for over 1.3 billion people. "Gold mine," he summed it up.
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