Arora stated that the Nifty index is up 10%, and the broader Nifty 500 index has risen 15% this year. These returns are reasonable and not excessive, he explained.
Addressing concerns about the US market’s strong performance, Arora said that much of the rally is concentrated in 10–15 key stocks, including the “Magnificent Seven” tech giants like Amazon, Google, and Microsoft. He said that these companies are cash-rich, major beneficiaries of artificial intelligence (AI), and not just speculative plays. With expected earnings growth of 15% and valuations in the 20s and 30s, there is nothing irrational about their current pricing.
He dismissed the notion of the US market being in a bubble, adding that the broader global market is not in a “mad bull run” either.
Also Read: Why Samir Arora feels it’s not yet time to invest in quick commerce companies
In India, Arora observed that the Nifty 500 index has delivered annualised returns of around 15% over the past three years, which aligns with the market’s long-term average.
Key sectors for 2025
Arora outlined his investment strategy, focusing on three main categories:
1. Financial Services: “Private sector banks and financial services remain a core part of the portfolio,” he said.
2. IT Sector: After being bearish on IT for two years, Arora has turned positive on the sector.
3. High-Growth Opportunities: He emphasized the importance of adding growth-driven sectors or companies to the portfolio. “We have chosen companies in food delivery and platform businesses like Paytm, PB FinTech, Swiggy, Zomato, and CarTrade. These companies are expected to grow earnings at 25–30% for the next 3–4 years, unlike banks and IT, which may grow at a steadier 12–15%,” he explained.
Sectors to avoid
Arora stated that he would stay away from electronics manufacturing services (EMS) companies. He said while EMS companies in India trade at higher multiples than their global peers, their valuations are not justifiable at extreme levels. Benchmarks trade at 8–10 times earnings, and even if you double that in India, you do not justify valuations of 150 times.
Also Read: Why the US market could correct 20% in 2025: Mark Matthews of Bank Julius Baer explains
For the entire interview, watch the accompanying video
