Prateek is happy seeing his team delivering alpha even in challenging markets like the last couple of months. He says this is a vindication of their philosophy of focusing on narrow themes with strong growth visibility and nimbleness in portfolio management to take profits and continually evaluate alpha opportunities.
He expects 2025 to be another rewarding year for alpha focused growth style stock pickers like the MO team. Value has had its run, there’s very little value left in value stocks. Quality/growth will be where money will be made going forward.
Just like 2003-2008 was a capex driven growth story, so is this decade shaping up. Renewable energy, EMS, defense, railways, power, cables, capital goods, real estate and allied sectors will continue to drive growth in the coming years.
This is not a time to bet on consumption stocks especially staples. Discretionary consumption targeting more affluent segments are however seeing rapid growth and will continue this trajectory in the coming years.
House view continues to be unfavourable on banks – postponement of rate cuts has given them just a temporary respite from the inevitable NIM compression that will kick in FY25-26 and beyond.
House view continues to be negative on commodities, cement, large cap IT, consumer staples.
He believes that with large caps looking reasonably priced and FY25-26 earnings expected to see growth return to mid teens from the current year’s slump, there is no need to fret too much about markets. There will be ample opportunities for stock pickers like MO, and he intends maintaining MO-AMC’s strong 2024 alpha track record into 2025 as well.