Sign In

Delhi News Daily

  • Home
  • Fashion
  • Business
  • World News
  • Technology
  • Sports
  • Politics
  • Lifestyle
  • Entertainment
Reading: Fund Manager Talk | Sanjay Bembalkar warns against chasing story stocks – Delhi News Daily
Share

Delhi News Daily

Font ResizerAa
Search
Have an existing account? Sign In
Follow US
© 2022 Foxiz News Network. Ruby Design Company. All Rights Reserved.
Delhi News Daily > Blog > Business > Fund Manager Talk | Sanjay Bembalkar warns against chasing story stocks – Delhi News Daily
Business

Fund Manager Talk | Sanjay Bembalkar warns against chasing story stocks – Delhi News Daily

delhinewsdaily
Last updated: June 20, 2025 4:02 am
delhinewsdaily
Share
SHARE


The market rally seen in the last 3-4 months has made seasoned fund managers increasingly selective about where they deploy capital. In an exclusive conversation, Sanjay Bembalkar, Head of Equity at Union AMC, shares his nuanced view on current market dynamics while issuing a pointed warning about certain sectors that have captured investor imagination but may be running ahead of their fundamental strength.

In this chat, he lays out his preference for consumer discretionary, industrials and financials. Edited excerpts from a chat:

Markets have seen a strong run in the last 3-4 months. Do you believe we are entering overvaluation territory, especially in mid and small caps?
Indeed, markets have rallied in the past 3 months. However if one takes a broader view of the various market caps, midcaps and small caps have taken a breather for the last 12 months and undergone time correction. Secondly, Q4FY25 has been the 2nd consecutive quarter where mid-caps and small caps have delivered better than expectations in terms of fundamental performance. Finally, the overall valuations premium which these companies were getting have undergone correction though they have not become cheap. If we take stock of these changes, we believe midcaps and small cap companies may offer better growth than large cap companies at now corrected valuations which are making us positive on mid and small cap category from here on. Our current view is positive on large cap, mid cap and small cap categories.Amid strong macro data points and RBI bazooka, how do you see the market trajectory shaping up over the next couple of quarters?
Projecting short term is always tricky. If we consider what has transpired since the Budget, tax benefits and reduction in interest rate trajectory should add a significant disposable corpus in the hands of the middle class. Whichever way this money gets spent, either it will end up in consumption or investments leading to better prospects for the economy. Government spending should be elevated considering its push for infra as well as now changed prospects for defence spending over FY26/27. Overall tariff uncertainty should subside over a period of time and should provide us clear direction on exports growth over time. As it has been well understood that India is one of the bright spots on the global economic and investment horizon, we believe, backed by fundamentals and favourable flows due to India’s positioning, markets are poised for a next positive trigger to unlock value.

ET logo

Live Events

How was the Q4 earnings season? Did corporate results align with market optimism?
The Q4FY25 earning season was better than expectations. However, one should note that expectations were quite muted thanks to long drawn slowdown in consumption and limited pick up in capital expenditure spending. The market did not yet see true animal spirits on capex announcements. Considering uncertainty on geopolitics and tariff, markets may have to be patient and wait for 2-4 quarters before we see continuation of capex announcements gathering momentum to align with market optimism.
Have you made any significant shifts in your fund positioning recently? What are you overweight or underweight on today?
We have observed that once uncertainty subsides, market participants focus on earnings growth and quality of companies business. We believe if these companies are bought at a reasonable price, they have the potential to deliver superior returns to investors over time. Hence, currently we are focusing on companies with domestic businesses and clear growth prospects. In our view, such companies are available in financials, consumer discretionary, industrial and defence space. Many of these companies might be of strategic importance where we believe the government would be keen to protect these companies in unforeseen circumstances. Considering the spending: we are positive on consumer discretionary, industrials and financials. We are underweight on consumer staples, IT and energy.

Are you holding higher cash levels as a tactical call or staying fully invested?
We do not take cash calls in our open-ended schemes; we remain fully invested in funds due to our constructive view on the markets. The situation however remains dynamic due to current short-term uncertainty in geopolitics and tariffs.

Are there any sectors you are cautious on, either due to stretched valuations or macro headwinds?
We are quite cautious on narrative focused sectors which have delivered disproportionate returns and are not backed by robust fundamentals. Such sectors/themes are reminders for investors that equity is a risky asset class with non-linear return profile. There are pockets of these companies in sectors like industrials, exports space which have run ahead of fundamentals and may see time/price correction.

How do you approach asset allocation in times like these? If you have Rs 10 lakh to invest, how would you divide it in between stocks, debt and gold/silver.
Investors are offered 2 key asset classes by markets: 1) Efficiency assets class like fixed income, stocks which derive its worth from underlying cash flows and 2) Scarcity assets class like gold, silver, rare coins etc which derive its worth from demand and supply of these assets. Since these assets derive their value from various factors, they typically have negative correlation in their return performance. We believe investors may take benefit of this characteristic and construct a robust portfolio for long term investment goals. Our current preference is: 1) 20-25% allocation to bullion assets like gold and silver and balance can be allocated between debt and equity depending on risk appetite of the investor. If required, we recommend investors to take help of financial advisors who can guide them over a period of time. In the equity portion, we recommend entering markets over 3-6 months via systematic route due to volatility expected in the near term.



Source link

Share This Article
Twitter Email Copy Link Print
What do you think?
Love0
Sad0
Happy0
Sleepy0
Angry0
Dead0
Wink0
Previous Article Samsung Galaxy Z Fold 7 Leaked Renders Hint at Design Changes; Storage Options Tipped Samsung Galaxy Z Fold 7 Leaked Renders Suggest Design Changes – Delhi News Daily
Next Article News18 PM Modi Expected To Fire Ambedkar Salvo At Lalu From Bihar’s Siwan Today: Sources – Delhi News Daily
Leave a comment

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Recent Posts

  • Why UAE cares so much about dates: From AED 8 million festival prizes to Golden Visas for date farmers | World News – Times of India – Delhi News Daily
  • ‘Calling people Nazi for thinking Sydney Sweeney is beautiful’: JD Vance reacts to American Eagle’s jeans row – Times of India – Delhi News Daily
  • ITC Q1 Results: Cons PAT rises 3% YoY to Rs 5,244 crore, revenue jumps 19% – Delhi News Daily
  • ‘Dangerous Game’: Rijiju Responds To Rahul Gandhi’s ‘Atom Bomb’ Attack On ECI – Delhi News Daily
  • New Rogue Planet Discovered in Hubble Data Using Einstein’s Gravity Theory – Delhi News Daily

Recent Comments

No comments to show.

You Might Also Like

Business

Quant Mutual Fund raises mid and small cap allocation across equity and hybrid funds, sees buying opportunity in 7 sectors – Delhi News Daily

Quant Mutual Fund has said their overall portfolio remains tilted towards largecaps, and the exposure in select mid and small…

7 Min Read
Business

SBI raises Rs 25,000 cr via share sale – Delhi News Daily

State Bank of India (SBI) on Monday said it has raised Rs 25,000 crore through Qualified Institutional Placement (QIP) to…

2 Min Read
Business

Are NSE and BSE closed on July 7 for Muharram 2025? – Delhi News Daily

Muharram, the first month of the Islamic Hijri calendar and one of Islam's four sacred months, began on June 27…

3 Min Read
Business

Vishal Mega Mart block deal: US asset manager Vanguard buys stake worth Rs 655 crore – Delhi News Daily

One of the world’s largest asset managers Vanguard on Friday executed two large block deals in Vishal Mega Mart Limited,…

4 Min Read

Delhi News Daily

© Delhi News Daily Network.

Incognito Web Technologies

Welcome Back!

Sign in to your account

Username or Email Address
Password

Lost your password?