Alok believes that all the bad news and uncertainty has now been priced in and the market is now ready for another rally, maybe after a small re-test of the bottom that has already been made.
Contrary to consensus opinion, he sees the industrials/infra pack leading the coming market rally as he feels the narrative on infra taking a back-seat in Government priorities is untrue.
From a base of spending Rs.10 lakh cr on infra in FY24-25, we will see a hefty 27% growth in FY25-26 in Central + State Government spending on infrastructure projects.
Significant business growth prospects coupled with valuations that have now been knocked down back to earth make industrials an attractive buy now. Little wonder Alok says that the current rally which began a few days ago, has seen industrials bouncing back sharper than the rest.
His contrarian views are clearly seen in the portfolio of ITI ELSS fund – which has a hefty 55% in small and midcaps while many peers have moved towards large caps and has a sizeable 21% allocation to industrials– almost twice the peer group average.
Many of the industrials are found in the small and midcap spaces, which therefore pushes up his allocations to these segments, given his bullish stance on the sector.
ITI’s ELSS fund has a robust 3 year performance record and while its 1 year performance was dented somewhat by the recent correction, Alok is confident of performance bouncing back and points out to its 1 month performance as evidence of markets rewarding his top picks in this recovery.