Three Sectors Reliance MF's Sunil Singhania is Buoyant About
BENGALURU: According to Sunil Singhania, CIO- Equity investment, Reliance Mutual Fund, the domestic stock market is trading at levels that are slightly better than the 10-year average but long-term investors should remain invested. He said that the investors should first look at the company and then decide the growth trajectory over the next five years. It has been raining good news for the financial markets in the last month or so and that is reflected not only in the Indian markets but global markets as well and Sunil Singhania seems to be really optimistic about the present scenario.
“You always have some kind of a buying panic and a selling fright or the reverse in the equity market. My advice to you is that do not buy anything because the sector is in fancy," Singhania said.
Singhania seemed to be particularly excited about three sectors. According to him these are the reasons for his optimism:
• NBFC stocks have already rallied on better asset quality, diminishing interest rates and the possibility of revival in credit demand as there are signs of an economic revival. "We are very positive on niche financials and specifically on companies that are catering to the huge shift from physical savings to financial savings. Out of the $500-$600 billion annually that we save, a lot of it goes into physical savings -- be it real estate or gold," he said. India is still lagging behind the world by 15-20 years if you look at the growth of the mutual fund industry, wealth management companies or the life Insurance companies compared with any of those in the developed world.
• As social drinking is becoming acceptable, most companies are trading at one time gross sales. "There is an overhang whether liquor will be included in GST or not. But I think we are pretty okay," he added. "This is a call which we took more from a business perspective with a time horizon of three-five years and we still do not see any reason to change that view," Singhania said.
• According to Singhania, 30 percent of the millennial and Gen Z population reside in India and they have not yet entered the drinking age. So, there’s every reason for us to be quite optimistic.
There are areas in the consumption business where the penetration is quite low. Apart from liquor sector, stocks in many sectors like building materials and fashion brands stand to gain. These sectors are expected to gain because as the standard of living improves, so does the life style of the customers.
"There is going to be a huge opportunity even on the consumption side," he said.
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