Platform and liquor stocks offer growth while gold remains non-productive, says Sunil Singhania

Indian equities continue to offer superior wealth creation compared to non-productive assets like gold, according to Sunil Singhania, Founder of Abakkus Asset Manager. Speaking ahead of the Mahurat trading session, the market veteran highlighted platform companies, niche manufacturing, and the liquor sector as key growth areas in an increasingly efficient market where few stocks remain undiscovered.

With numerous analysts tracking the market, finding completely hidden ideas is difficult. Instead, generating returns depends on taking a differentiated view on growth prospects and temporary headwinds. Investors can find opportunities in sectors facing short-term regulatory hurdles, such as gold finance or pharmaceutical companies hit by inspection negatives. Stock reactions are driven by performance relative to expectations rather than absolute numbers. A company reporting 30% growth might see its stock fall if the market anticipated 32%, while a reported loss could trigger a rally if investors had braced for a steeper decline.

Within emerging themes, platform businesses operate on a clear winner-takes-all model. “If you are sure that this guy is the potential 80% market share, then you will make a lot of money,” Singhania noted, pointing out that the runner-up typically secures the remaining 20% while others fail. Niche manufacturing is also emerging as a faster-growing segment, with unique businesses coming to the forefront.

Despite near-term challenges such as rising input costs, deficit monsoons, and state-specific regulatory hurdles like Telangana receivable bills, the liquor sector remains a strong consumption play. The industry is clocking faster growth rates than traditional staples, driven by premiumisation and widening social acceptance. While the space is heavily regulated, governments rely on it as a major revenue contributor, ensuring its continued expansion even as some stock valuations appear expensive.

Contrasting equities with precious metals, gold lacks the compounding benefits of corporate earnings. Buying 100 grams of gold yields no interest or dividends over 20 years, whereas a company with a ₹1,000 crore turnover could scale to ₹10,000 crore or even ₹30,000 crore over the same period. Gold also experiences long cycles, often delivering no returns for four to five years before a sudden spike.

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Nifty may lag as India’s next generation of market leaders takes shape: Sunil Singhania

While gold recently dropped 30% in dollar terms, domestic investors were shielded by a 10% rupee depreciation and a 10% hike in import duties, limiting the rupee-term decline to 10-15%. Silver, by comparison, has fallen 30-40%. However, the over-transparency of modern equity markets—where portfolios are tracked minute-to-minute—often hurts investor psychology compared to the less visible price movements of physical gold or real estate.