Market Mantra! Why putting your eggs in a few baskets could be a great idea

Saigal said , industrials and defence have been laggards for long and have now started showing some signs of tailwinds and markets expect them to catch pace going forward. In his view, while autos remain in an interesting space, the significance of upside will follow economy-related sectors, capital goods, manufacturing and cyclicals.

Echoing a similar sentiment, analyst Sanjiv Bhasin, Director at , feels that the Indian markets will remain going ahead with no big moves seen in the index in the near term.

Notwithstanding a meltdown over the last four sessions where headline index S&P BSE Sensex has lost nearly 1% or 740 points after hitting a fresh lifetime high of 76,009, the rally has been 19% in the last one year. Nifty on the other hand has given an even impressive returns of 22% in the same period.

The rally in broader markets has been much sharper with the Nifty Midcap 100 gaining 56.40% in the past 12 months while Nifty Smallcap 100 rising by 69.09%.

On the back of this rally, the opportunities for diversification remain limited, Saigal said. In his view, the market is getting highly skewed in favour of individual investors and the fund managers ought to give upsides, which is now difficult with markets witnessing a strong rally in the last one-and-half years.

"There will be money-making opportunities which will be stock-specific, sector-specific and so to make a material difference to your portfolio, you will need to be concentrated in those segments," Saigal said without mincing words, stating that this was not a market for diversification but one which will remain narrow.

Pankaj Pandey, head research, ICICIdirect.com, is banking on the given the on infrastructure. He highlighted how the capex-to-GDP has “literally doubled” in the last 4-5 years and is likely to stay at elevated levels for a decent period of time.

Pandey said from a price performance perspective, key sectors like cement have not seen much with Q4 remaining softer amid price correction and notwithstanding volume growth. His sense is once the monsoon gets over, the focus will shift towards the overall infra spend and cement sector could benefit with the likes of , , UltraTech Cement and JK Cement taking the lead.

"The industry is probably going to grow at 8-9 odd per cent but all these companies, because of capacity expansion ideally, should be growing at 12-13 odd per cent if not more and valuation-wise, we feel they are quite attractive," Pandey said.

N Jayakumar, Managing Director at Prime Securities, sees big opportunities in the pharma sector. "The biggest reason being the sectoral weight that pharma enjoys is still to my mind under 6%. Number two, most of the stocks there represent under ownership, reasonably high promoter ownership, and participation still is low," he reasoned.

He sees large gaps in places like Europe or the US and Indian companies could benefit from the crisis. "A lot of the generic players in these markets have collapsed because of substantially higher interest rates compared to historical parallels. So companies that had borrowed at 8% and 10% have closed on. Nearly four or five bankruptcies in the space of small companies or mid-sized companies have meant that shortages have persisted,"Jayakumar said.

Bhasin who sees a further 200-300 points correction in Nifty in the run-up to the general election 2024 outcome on June 4, picks stock market heavyweight HDFC Bank along with Hindustan Unilever (HUL) and Marico as his top bets.

Meanwhile, Saigal advises against taking chips off the table amid the current volatility and doubts over the margin of victory for the incumbent. "If the current dispensation comes back, then there will be a mad rush to get back into the Indian market at whatever valuation," Saigal opined.

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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)