Do you expect the ongoing Budget session to be smooth in terms of passing bills crucial to economic continuity?

Given that the government holds a majority, IL anticipate that the Budget session will proceed smoothly in terms of passing crucial bills. Over the next six months, at least, it seems likely that most bills will be passed without significant issues. The Finance Bill is essential, and I expect it to pass without major obstacles. While there may be debates and discussions in Parliament, I don’t foresee any significant political logjam that would hinder the legislative process. Growth (GDP) has been robust and has been upgraded by multiple agencies (for FY25). With inflation at around 5%, nominal growth will be around 12%.

How do you view this from an earnings perspective for large, mids, and smalls? 

Broadly speaking, I project that the Nifty 50 should see around 15% earnings growth for fiscal 2025. Key sectors leading this growth will likely include banks, IT, oil and gas, and metals. These sectors are expected to drive significant earnings. While midand small-cap companies are more diversified, with some experiencing losses and others performing well, I anticipate that the overall earnings growth in these segments will be faster due to controlled inflation and robust economic conditions. However, growth will not be uniform across all companies.

What sectors are you most bullish on and which would you avoid? Why? 

I am bullish on sectors with strong earnings growth potential. PSUs are attractively valued relative to their growth prospects, especially those with monopolistic characteristics. The banking sector, including BFSI, particularly the insurance sector, is an other area with promising earnings growth. IT is expected to make a comeback in the second half of the fiscal year, looking strong going into 2026. Oil and gas, along with metals, also appear to be in a good position. On the other hand, 1 would avoid sectors where valuations are very high INTERVIEW despite expected earnings gr0wth. Capital goods and defence companies fallin this category, as their valuations are not favourable. Additionally, the power sector, despite its growth potential, has stocks that are often priced to perfection, making them less attractive for investment.

How do you feel about new-age sectors like semiconductors, renewable energy, etc.? 

New-age sectors like semiconductors have great potential but are still in the early stages of development. India needs significant investment to build a robust semiconductor ecosystem that can reduce reliance on imports from countries like Taiwan and China. The focus is On Creating value domestically rather than just importing and assembling. Traditional valuation methods may not be suitable for these sectors due to their high capital expenditure, modest initial revenues, and potential losses. The success in these sectors will depend upon sustained investment and effective execution. Renewables are not particularly new age. The government has kept stiff targets to meet till 2030, 2050 and 2070 when we go Carbon zero. Renewables, particularly, wind and solar look very Banks, IT, oil and gas, metals… in the money management sector is progressing towards the standards seen in developed markets, benefiting investors immensely. Regulatory actions currently being taken are appropriate and part of the natural evolution towards better governance.

Specific incidents of excesses by shadow banks should be seen as exceptions rather than the norm. Is growing retail participation in F&O a worry?

es, the growing retail participation in Futures and Options (F&O) is a concern. Many retail investors view it as a quick way to get rich, often underestimating the risks involved. The reality is that making money in F&O is extremely challenging, especially against sophisticated institutional investors and algorithmic traders. Retail investors are often better off adopting a disciplined and patient approach to investing rather bullish. these sectors than seeking There are quick profits increasingly are expected to tough high risk worrying in drive significant avenues rents of earnings.