Nilesh Shah, Managing Director of Kotak Mahindra AMC, expects a broad-based earnings recovery in Samvat 2083. He said, "The resilience of the Indian economy has been impressive despite elevated oil prices." Shah sees potential in banking, premium consumption, and modern manufacturing. He believes these sectors will benefit from improved market sentiment.
Nilesh Shah, Managing Director of Kotak Mahindra Asset Management Company (AMC), expects a broad-based earnings recovery in Samvat 2083, alongside sustained economic growth. "The resilience of the Indian economy has been impressive despite elevated oil prices, supply-chain disruptions, a below-average monsoon and US tariffs," he said in an interview with Moneycontrol. The underlying strength is real, but the distribution of costs matters, he added. According to Shah, a decline in oil prices, a reversal in the AI trade and more factual reporting on India's economic performance could help revive foreign portfolio investor (FPI) flows.
Shah believes three areas stand out in Samvat 2083: banking, financial services and insurance (BFSI); premium consumption, including automobiles, travel and healthcare; and modern manufacturing. Do you see early signs of FII flows returning to emerging markets, including India? Could Samvat 2083 turn out to be a year of strong net FII inflows? I spent the last 12 days in the US and Canada meeting pension funds, sovereign wealth funds, family offices and endowment funds. India has never gone off their radar. Some NRIs still view the country through the lens of when they left; others are influenced by persistently negative coverage in parts of the global media.
Most, however, continue to monitor India closely. If we see lower oil prices, a reversal in the AI trade, and more factual reporting on India's economic performance, FPI flows can return. The fundamental interest remains intact; the catalysts just need to align. What are the top three firecracker sectors on your radar for your Samvat 2083 portfolio? Three areas stand out: BFSI; premium consumption (auto, travel and healthcare); and modern manufacturing. These combine structural growth with the ability to benefit from any improvement in sentiment and liquidity. What would be your biggest contrarian investment call for Samvat 2083?
There is no specific contrarian call. We have to invest in good companies run by good managers at good valuations. In cricket, there can be a sweep or a reverse sweep, but ultimately one has to judge the ball and play the shot. Process and quality matter more than trying to be contrarian for its own sake. Given the pre-Diwali rally, do you strongly believe that Samvat 2083 could end with 15-20% gains in the Nifty 50, accompanied by broad-based buying across the market? We do not believe we have the ability to predict the future with that degree of precision. The right approach is to invest in equities on a longer-term basis and stay focused on fundamentals rather than short-term index targets.
Which sectors do you think will lead the market's upward trajectory? Large- and mid-cap stocks should participate. Within that, financials and premium consumption are the segments most likely to lead any sustained upward move. Following the Democrats' decisive victory in the US midterm elections and the setback for Donald Trump, do you expect global markets to become less concerned about policy-related uncertainties? Could this improve the outlook for a global economic recovery, with some of the major headwinds now potentially behind us? It is too early to say. If President Trump vetoes legislation passed by the House and Senate, gridlock is possible.
That may reduce policy uncertainty, but it can also hit global growth. In any case, global growth today is far more dependent on supply-chain disruptions and dumping by China than on US political developments alone. Do you expect geopolitical tensions in West Asia to ease following the US midterm elections? Could this lead to a further correction in crude oil prices towards $65-70 a barrel in the near term? Who knows what Trump will do. Don Ko Samajna mushkil hi nahi namumkin bhi hai. Geopolitical outcomes remain highly uncertain and cannot be taken for granted simply because of the midterm results.
In any case no House / senate has ever opposed provision of funds for the war in USA. Do you expect a broad-based earnings recovery in Samvat 2083, along with sustained economic growth, particularly as several macroeconomic and geopolitical risks begin to ease? Yes. The resilience of the Indian economy has been impressive despite elevated oil prices, supply-chain disruptions, a below-average monsoon and US tariffs. However, the government has absorbed the maximum pain through oil and fertiliser subsidies. If that burden is shared with corporates and consumers, earnings in the second half of FY27 will be impacted.
The underlying strength is real, but the distribution of costs matters. With inflationary and other macroeconomic concerns showing signs of easing, do you believe the possibility of further interest rate hikes by the central bank has diminished significantly? Central banks will decide based on data. If oil prices come down to some extent, inflationary pressure will soften, which improves the odds of a more supportive policy stance. But the outcome remains data dependent. Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management.
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