Overweight on financials, industrials; power, trains, defence look appealing for long term: Mihir Vora, TRUST MF
Specialist view on markets: Mihir Vora, CIO at TRUST Mutual Fund, predicts a positive medium-term outlook for the Indian stock exchange, driven by strong revenues and appraisal convenience in mid and small-cap sectors, along with supportive macro conditions and geopolitical reliability.
Specialist view on markets: Mihir Vora, CIO at TRUST Mutual Fund, believes the medium-term outlook of the Indian stock exchange is favorable. He underscored that healthy incomes and evaluation convenience are driving the mid and small-cap sectors. In an interview with Mint, Vora shared his views on markets and sectors he is favorable about. Here are modified excerpts of the interview: What is your medium-term outlook for the Indian stock market? Does it lack activates to scale fresh peaks? The medium-term outlook is positive, albeit with threats in the background, and there are numerous potential triggers which can possibly take the marketplace to new highs. Macro conditions in India are firming up. GDP for Q4FY25 amazed positively at 7.4 per cent, driven by a steady expansion in personal consumption on the rural side and capex momentum in federal government costs. CPI inflation reduced to 3.2 percent, remaining well listed below the RBI’s upper tolerance. Forex reserves reached $693 billion, liquidity conditions turned surplus, and the manufacturing PMI stayed robust at 57.6, signalling sustained momentum. May saw the greatest month-to-month FPI inflows in 8 months, while DIIs continued their net purchasing streak. The market has re-rated greatly over the past year, however with forward revenues growth of 12-15 per cent, supported by private capex, corporate deleveraging, and strong domestic need, there’s essential backing to this optimism. The current terrorist occasion and India’s swift, decisive response led to a surge in domestic self-confidence. Tactically, India’s firm position versus future attacks and its demonstrated military precision contributed to the nation’s geopolitical credibility. RBI offered an additional boost to growth sentiments with a sharp rate cut and CRR cut, clearly showing a pro-growth stance as inflation is under control. The worldwide background is favorable, and lots of central banks are cutting rates. In general, financial conditions are simple and conducive for danger properties. Do you see any risk of a much deeper correction? A much deeper correction would most likely be triggered by external elements instead of internal. Trade wars, currency volatility and other geopolitical issues may impact the marketplaces in the short-term. What is driving fresh momentum for mid and small-cap segments? Do you see value in these sections? The midcap and small-cap sections had seen a time and rate correction in the last 6 months. This led to assessments going from expensive to a more reasonable zone. The profits season has been quite helpful for midcaps, which has actually activated the success of these and small-caps. The majority of the sectors succeeding are the ones that did well in the previous run. And now, with the RBI policy, even the financials are capturing up. What sectors can potentially outshine in the next one to two years? We continue to think that the domestic sectors will do better than the international sectors. We are favorable on financials, industrials, chosen utilities and selective consumer discretionary sections. The other locations where we see excellent development on a long-term basis are segments like power transmission, circulation, railways, defence, renewables, and so on. Do you believe the defence and PSU sectors use long-lasting chances? Is it the correct time to bank on them? We have actually been bullish on defence for quite a long time and continue to do so. We believe it is a really long-term story as the sector has simply started to emerge in the previous couple of years. It is seldom that you can get entry into a sector with a long runway simply as the sector is beginning to open and grow. The crucial trigger is the opening up of the sector to the economic sector. Now, apart from local need, we can cater to the international defence markets, which have far bigger capacity. As far as PSUs are concerned, we do rule out all PSUs as a monolithic segment. It consists of stocks in various sectors, and we evaluate each stock on a standalone basis rather than utilizing the same broad brush to paint all of them. What should be our equity financial investment strategy at this juncture? Macro principles, policy clearness, and widening sectoral involvement provide a strong background. While global risks stay, India’s durability and reform-driven growth make it an engaging structural story. Volatility might continue, however financiers with a disciplined possession allowance and long-term point of view should stay invested. We are favorable on the domestic sectors compared to the global. We are overweight on financials, industrials and underweight in consumer staples, utilities, energy and customer discretionary. Offered Trump’s tariffs and international unpredictabilities, how do you see Indian growth-inflation characteristics evolving in the medium term? India has the least dependence on exports as a portion of GDP. While there will be a global impact and India may not remain completely untouched, we believe that we will be able to tide out through the crisis with a good diplomatic technique and the strength of domestic demand. India will continue to stay the fastest-growing large economy in the world. Inflation is not a concern as our financial and financial policy has actually been quite prudent. Have you discovered a current pattern of increased inflows into flexi-cap funds over the previous few months? We are seeing circulations in both our funds, and even our small-cap fund is close to 1,000 crore in properties. Trust Mutual Fund’s flexi-cap fund just recently surpassed 1,000 crore in properties under management. In the existing market, the allocation remains in large-cap stocks. What is your method progressing? We follow a market-cap agnostic approach and pick and choose the very best stocks across all market-cap pails. While the allotment changes from time to time, currently, less than 50 per cent of our portfolio is allocated to big caps. Read all market-related news here Find out more stories by Nishant Kumar Disclaimer: This story is for academic functions only. The views and suggestions above are those of specific analysts or broking companies, not Mint. We recommend investors to talk to qualified professionals before making any investment decisions, as market conditions can alter quickly, and situations might vary.
In an interview with Mint, Vora shared his views on sectors and markets he is positive about. We continue to believe that the domestic sectors will do better than the international sectors. It is not really often that you can get entry into a section with a long runway just as the sector is starting to open up and grow. The crucial trigger is the opening up of the sector to the private sector. We are favorable on the domestic sectors compared to the worldwide.
