1 hr ago
Abakkus Sees Stock-Level Opportunities in Earnings-Driven Indian Market
Abakkus Mutual Fund says investors should look at individual companies instead of judging the whole stock market by its average price.
It says companies can have very different prices and growth prospects, even when they are in the same group.
The report says investors should consider how much a company may grow and whether its business can keep growing.
Events such as higher oil prices and changes in interest rates may make markets bumpy for a while.
The report says the strength of individual companies’ earnings will matter when these pressures settle.
It points to electric vehicles, cybersecurity, wealth management, asset management and medical tourism as possible growth areas.
Many businesses in these sectors are currently small or very small.
The report also cites India’s economic growth and rising incomes as support for its long-term outlook.
Abakkus Mutual Fund says Indian equities are shifting toward an earnings-driven market, with opportunities across market-cap segments.
The report urges investors to assess individual companies’ earnings growth, valuations, addressable markets and ability to sustain growth.
Abakkus CEO Vaiibhavv Chugh said about 45% of mid-cap stocks trade below 30 times earnings, while about 40% trade above 40 times.
The report says geopolitical developments, higher crude prices, US interest rates and currency movements may cause near-term volatility.
It identifies electric vehicles, cybersecurity, wealth management, asset management and medical tourism as areas with growth potential.
- Who
- Abakkus Mutual Fund and its CEO, Vaiibhavv Chugh.
- What
- The fund house says investors should focus on individual stocks and company earnings rather than only broad market valuations.
- Where
- Indian equities.
- When
- The report was cited on Friday; it also discussed opportunities over a four- to five-year horizon.
- Why
- The report says valuations and growth prospects differ across individual companies, creating opportunities despite market weakness and near-term volatility.
Broad market concerns
Company-level opportunities
How to assess valuations
Broad market concerns
Headline valuations suggest the market is expensive, and market weakness and external pressures may create volatility.
Company-level opportunities
Abakkus says valuations vary widely within indices and investors should assess individual companies’ earnings, growth prospects and addressable markets.
Near-term volatility versus longer-term potential
Broad market concerns
Geopolitical developments, higher crude prices, US interest rates and currency movements could unsettle markets in the near term.
Company-level opportunities
The report says company-specific earnings resilience may matter more once these factors stabilise, and current market reactions could create missed opportunities over four to five years.
Key facts
- Source
- Abakkus Mutual Fund report
- Market view
- Indian equities are shifting toward an earnings-driven market
- Mid-cap valuation split
- About 45% of mid-cap stocks trade below 30 times earnings; about 40% trade above 40 times
- Potential horizon
- Four to five years
- Near-term volatility factors
- Geopolitical developments, higher crude prices, US interest rates and currency movements
- Sectors cited
- Electric vehicles, cybersecurity, wealth management, asset management and medical tourism
Quotes
Vaiibhavv Chugh
CEO of Abakkus Mutual Fund
“Ultimately, stock price return is equal to the earning growth, which has stayed consistent for the past 30-40 years, and earnings growth has roughly replicated nominal GDP growth.”
thehansindia.com
Sources
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