According to Arora, while returns of 20-25% might not be realistic, investors can expect reliable double-digit growth in the range of 15-17%, depending on market conditions.
He described these stocks as offering “high confidence in reasonable returns.”
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Arora pointed to opportunities in smaller, fast-growing companies like Indegene and smaller hotel chains but also the need for diversification when investing in such stocks.
“We diversify across different themes and, in our case, around 15-18%, but that is spread across five stocks,” he explained.
He highlighted the value of maintaining a balanced portfolio that combines large-cap stable stocks with smaller, higher-risk, high-growth stocks. “If you are too much in small and mid-cap, then it is better for you to buy a large-cap, stable stock. And if you are only into the old, stodgy companies, even though they are promising to be okay, you need a bit of variety and a bit of higher growth, higher risk,” he said.
Foreign institutional investors (FIIs), he noted, are adjusting their portfolios by selling older holdings and investing in qualified institutional placements (QIPs) and initial public offerings (IPOs). They are moving away from consumer goods and automobile stocks.
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“There is no point in ever talking about absolutely one or the other. Of course, you can have groups of sectors doing well and expectations of groups of sectors doing badly. But there is no overdoing anyone, I would say, because you never know what fancy the market takes,” he added.
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