Mid Caps And Small Caps
Mid and small caps are one of the best buying opportunities since March 2020, he said. “You will make money if you have a 12-24 month time frame.”
He cites the market breadth data in the past few months that has shown phenomenal results. “It was extremely oversold. The potential to rise is substantial. In the next 6-10 months, it may even strike a lifetime high.”
FMCG And Auto
According to Shah, the FMCG and auto sectors are the new leaders of the recovering market, which is “unusual”.
The momentum in the real-estate market will persist, as seen over the last 18 months, Shah said. “Real-estate will at least make new 52-week highs and the best is yet to come in the sector.”
Top sectoral stocks are performing well and this is a “mega medium-term opportunity”, he said.
“If the Nifty falls, real estate will follow suit. But overall from the medium and long-term perspectives, the risk is 5-7% and upside is 20% on an index level. The stocks will do much better.”
According to Shah, the metal sector has “lost its charm”. It had a phenomenal two-year run but some of the top stocks falling by 40-50% in the past eight months can lead to a minuscule bounce-back, he said.
He emphasised that the present market is not about metals, IT or banks; it’s about other sectors as the leadership has changed.
Shah expects crude oil to stay between the $85 and $120 a barrel, which is great for India.
On the other end, public sector units take a lot of time to gain momentum and there is immense opportunity in the broader market, he said. Therefore, sticking to the top five PSU names is not wise.
“If you are an investor with a 12-36 month horizon, go ahead and buy PSUs. You will make money.”
But if one is looking at momentum, then these stocks and perhaps even Reliance Industries Ltd. will underperform for some time, he said.
“Auto auxiliary as a basket is absolutely hot, and there is a lot more to go,” Shah said.
Mahindra & Mahindra Ltd., Maruti Suzuki India Ltd., Bajaj Auto Ltd., Tata Motors Ltd. are some of the top names he sees as promising.
“Please stick to the industry leaders and challengers. That’s the best way to claim your money,” he said.