As markets cheer exit poll numbers amidst high valuations, Shreyash says it’s important to examine the long term case for each sector and sub-sector. Be cautious on sectors with limited growth runway (this could include some sub-segments within roads, defense, railways etc) while remaining invested in those with genuinely long growth runways (electrification is a good example).
Axis Multicap Fund has posted a strong 1 yr performance(12% alpha over BSE500 TRI, 3% over peer group average). Stock picks across sectors including real estate, consumer durables, power, midcap IT etc have been key performance contributors.
While Shreyash is comfortable with industrials as well as consumer discretionary now, at the margin its industrials that he is allocating more to, in his fund.
Real estate may look optically expensive now, but with the kind of growth runway ahead, there remains a strong case for select stocks in this promising sector.
Midcap IT stocks have been doing far better than their large cap peers and within this, companies that specialize in certain verticals or horizontals have done well and will likely continue to. Shreyash believes that the sector as a whole looks ripe for the next leg up after trading sideways for the last 15-18 months.