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Singhania Sees Capex Strengthening as External Uncertainties Ease
Sunil Singhania says many Indian companies are in a good position, but uncertainty abroad is making businesses cautious.
The conflict in West Asia may keep oil and transport costs high.
That can add to inflation and affect interest rates and markets.
Singhania thinks the Nifty 50 may grow steadily, but its biggest sectors may limit how fast it rises.
He sees more growth potential in smaller companies and newer industries.
Still, he warns that some of those shares are expensive because investors are buying into exciting stories.
He says investors should compare a company’s price with how fast it can grow.
Private companies are starting to invest more, and their finances are generally healthy.
He expects capex to strengthen further if outside uncertainties ease.
Sunil Singhania said the Nifty 50 is slightly below its 10-year average valuation but may deliver returns broadly in line with normal GDP growth.
He said mid- and small-cap companies in emerging sectors could grow faster, while warning that some stocks are priced on themes and speculation.
West Asia conflict-related uncertainty is contributing to higher oil, freight and logistics costs, inflation concerns and rising bond yields.
Singhania said FII flows had paused in September after inflows in July and August, while the rupee had weakened to around 94.50 and was moving closer to 96.
Private-sector capex is picking up, but external uncertainty has made entrepreneurs more cautious; Singhania cited healthy corporate balance sheets and low defaults.
- Who
- Sunil Singhania, chairman and managing director of Abakkus Asset Manager Pvt. Ltd.
- What
- He discussed Indian market valuations, investment risks, external uncertainty and the outlook for private-sector capex.
- Where
- The discussion focuses on India, with external risks linked to the West Asia conflict.
- When
- The interview refers to July, August and September but does not specify a year.
- Why
- Uncertainty over the conflict, oil prices, inflation and interest rates is affecting market sentiment and business decisions.
Key facts
- Interviewee
- Sunil Singhania, chairman and managing director at Abakkus Asset Manager Pvt. Ltd.
- Nifty 50 valuation
- Slightly below its 10-year average, according to Singhania.
- Nifty outlook
- Potential returns broadly in line with India's normal GDP growth, but limited scope for very high growth.
- Potential growth sectors
- Precision manufacturing, renewable energy, electric vehicles and defence.
- FCNR deposits
- Around $135 billion had come in, according to the interview.
- Sowing
- About 1% below normal; Singhania said there was still hope for a normal winter crop.
- Private-sector capex
- Picking up, though external uncertainties have made entrepreneurs more defensive over the previous one and a half years.
- Corporate balance sheets
- Singhania described them as very strong, with low defaults and among the healthiest debt-equity ratios seen.
Sources
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