Alok is not worried about the current cyclical slowdown in the economy and its impact on earnings as he says this is a routine that plays out every General Elections year. He points out to 2019 and 2014 where we had similar near term slow downs as Government decision making and spending come toa halt in the months prior to and during elections.
Valuations in the large caps space are now close to historical averages but continue to remain high in mid and small caps. There is a case for consolidation in pockets which have run ahead of earnings growth.
However, wide dispersion in earnings growth and valuations across sectors gives ample scope for stock picking even if markets at a broader level may go through some consolidation.
Cement, pockets within FMCG, auto, IT and lenders(banks/NBFCs) look promising, segments within healthcare continue to offer value.
Metals/oil/commodities pack are inexpensive, but he would rather wait for the dollar (DXY) to top out decisively before considering them.
Industrials are expensive from a near to medium term perspective, though the long term continues to hold lot of potential.
His dark horse picks for 2025 are quality lenders in the NBFC space.