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“Our assessment is that the first half will be a more benign period, with recovery accelerating in the second half. Index-level returns could resemble last year’s high single-digit growth in this matured bull market,” he said.
On the consumption sector, he sees uneven performance. Some of the companies like Avenue Supermarts and V-Mart have demonstrated strong results but that is largely due to strong execution rather than a sector-wide trend.
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“Rural consumption has been slow for six quarters, and while there is some recovery, it is modest and from a low base. Much of the growth reported by consumer companies is driven by price increases rather than volume growth.”
Murarka believes investment driven companies or sectors will outperform consumption, which is exactly opposite of what we had in a decade prior to COVID.
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He remains overweight on IT, expecting a strong performance in the medium-term.
“We continue to like large-cap names such as Tech Mahindra and Infosys, along with mid-cap players like Persistent Systems and Coforge.