Fund Manager Talk | Don't make lumpsum investment in this phase of bull market: Naveen KR

How are you approaching the market ahead of the Budget? Do you think the bias towards capex, infra and PSU related themes will remain intact after July 23?

The markets are expected to remain buoyant before the Budget. Yes, we feel that the government will maintain and continue its focus on capex, infrastructure and other PSU related themes, as these initiatives have yielded good results for the Indian economy. If at all anything, the focus towards these themes should only increase to uphold the strong GDP growth.

Overall, what are your expectations from this year's Budget as an investor?

The key expectations from this year’s Budget is policy continuity. As we witnessed in the previous two budgets, our expectations are that the government will continue to focus on key sectors like rural, infrastructure, roads & railways, smart urban planning and the likes. The best part about a government continuing its ruling tenure is that it is able to carry and maintain its previously announced policies and at the same time come up with new measures to achieve holistic economic growth.

What can be the best and the worst case scenario for investors in the Budget?

The best case scenario for investors in this Budget would be a strong focus not only on erstwhile sectors aforementioned, but also towards sunrise sectors like green energy, electric mobility, digital inclusion, automation and so on that will stimulate growth. Like we say every time, any relaxation in income tax or capital gains would be a very good outcome for investors. Worst case scenario would if the government presents a shaky and populous Budget just to appease the public. That will not only show under confidence, but also will restrict the growth of key sectors.

Would you agree that PSU rail stocks are a momentum play in the short-term but pricey to own for the long term?

PSU rail stocks are definitely riding on a strong momentum, however it is extremely difficult for one to comment whether this phenomenon will play in the short term or long term. On one hand, these rail companies have a very strong order book (for companies like Titagarh & , their book to bill is close to 4x), while on the other hand these companies are extremely sensitive to policy measures and the overall macroeconomic environment. Hence, this market pocket is definitely pricey and investors should tread with caution before making any investment decisions.

Given that the market is throwing up opportunities across multiple themes, are you planning to start more thematic smallcases?

Markets will always come up with multiple opportunities and we shall keep evaluating all of them. If any of the themes sits well into our framework and matches our ethos, we won’t hesitate to launch small cases on those concerned themes.

What is the biggest risk that you see for investors for the rest of 2024?

Not sure if we can comment on a short span like the coming six months, in general, the word from our side is to tread with caution and maintain asset allocation. Over indexing in one section of the market might lead to erosion of capital which is unnecessary. Also, this is a time to stick to the SIP strategy and not enter the markets with a lump sum amount, as indices are touching new highs everyday. Therefore it is better to invest one’s money in a staggered way and more importantly at the right places.

Which pockets of the market do you think offer enough value even at this stage of the bull market?

Well, almost all of the sectors have had a strong bull run, we would say that many financials, commodities, energy, chemicals stocks are trading at cheap valuations. Hence, investors could see some potential entry points.

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