India’s equity markets may appear subdued at the benchmark level, but significant action is unfolding beneath the surface, according to Tushar Bohra of Invexa Capital. While large-cap indices have struggled to generate excitement, broader market segments have delivered strong returns, driven by investor interest in select sectors and structural themes.
Speaking in an interview with ET Now, Bohra said the divergence between benchmark indices and the broader market has become increasingly pronounced over the past few months.
Mid-caps and small-caps drive market momentum
Tushar Bohra pointed out that while headline indices have remained largely range-bound, midcap and smallcap stocks have witnessed a sharp rally.
“If you look at the benchmark index over the last one year or even the last three months, there doesn’t seem to be a lot of activity. But behind the scenes, there has been a carnage of activity in the broader markets,” he said.
According to Tushar Bohra, the midcap index has gained nearly 18 per cent over the past three months, while the smallcap index has surged about 25 per cent during the same period. Several stocks have also touched fresh lifetime highs, reflecting strong investor participation outside the large-cap universe.
Financials offer attractive risk-reward
Among sectors, Tushar Bohra identified financial services as one of the most compelling opportunities currently available.
“Almost all major investors and fund managers are positive on banks and NBFCs. The sector has value and may continue to deliver good returns incrementally this year,” he said.
Export and Import-substitution themes back in focus
Bohra also highlighted export-orientated sectors and import-substitution opportunities as key structural themes that could outperform over the coming years.
A weaker rupee has improved India’s competitiveness relative to several trading partners, creating favourable conditions for domestic manufacturers and exporters.
“With the rupee having depreciated substantially over the last year, Indian industry has become more competitive. Both export and import-substitution themes can be looked at more closely from here,” he said.
Pharma continues to deliver strong returns
The pharmaceutical sector remains one of MK Ventures’ preferred investment themes, with Bora highlighting multiple pockets of opportunity.
“In the last one month, at least five of our pharma holdings have hit new lifetime highs,” he said.
“CDMO continues to deliver strong upside and has fundamental tailwinds for a much longer horizon,” he noted.
Manufacturing revival could surprise investors
According to Bohra, manufacturing-linked companies may emerge as major beneficiaries of changing global dynamics.
“There is a lot of scope for manufacturing-led companies to deliver better earnings and therefore better returns,” he said.
IT sector faces structural questions
While acknowledging that information technology stocks have corrected from their peaks and appear cheaper than before, Bohra remains cautious on the sector.
He warned that the impact of artificial intelligence on traditional IT services business models remains uncertain.
“We do not know whether this is a temporary bad phase or the beginning of a structural decline in the sector,” Bora said.
“Trying to identify investment themes in IT right now would be akin to picking pennies in front of a road roller,” he remarked.
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)
