stocks to buy | largecaps: ETMarkets Smart Talk: Ramkumar explains why largecaps are a better play in 2023 vs small & midcaps
In an interview with ETMarkets, Ramkumar said: “The large companies have protected their earnings better than the mid and small-cap companies where the variance in performance was quite high,” Edited excerpts:
What are your expectations from Budget 2023?
We expect higher allocation towards capital expenditure in this Budget. The higher nominal GDP for FY23 should help contain the fiscal deficit at lower than 6.3%.
This higher base with projected nominal GDP of 11% for FY2024 in the Budget should help the Government keep the fiscal deficit at 5.9%.
With higher maturities of existing Government Bonds the Gross Borrowing shall be higher than last year’s number though the Net borrowings may be lower.
Which sectors are likely to be in limelight in Budget 2023?
The capital goods sector shall be in the limelight as we expect the public capital expenditure to be increased further over the last year’s 7.5 lakh crore.
« Back to recommendation stories
Which sectors will lead markets in 2023 – will the winners of 2022 continue to dominate market action in the new year?
We expect Large Capital goods companies, Railways dependent companies, Domestic Pharma, and I.T. to do better in the year 2023 as compared to the other sectors.What do you make of the December quarter results from the IT sector? What is your pecking order?
Only a few largecap companies have come out with the results. The results are better than expectations and lower guidance is not as severe. A secular trend of double-digit growth even in this tough year is something worth to ponder.
Where is the smart money moving in 2023? Have you spotted any early trends?
The smart money being dominated by AIFs, PMS, and HNIs carries a lot of momentum in their approach and their investment horizon is getting shorter. We would monitor it closely but not emulate their approach.
Which sectors are you overweight and underweight in 2023?
We would prefer to be overweight on cement, capital goods, railways, IT, and pharma. We would be cautious on BFSI.
What do you make of the huge SIPs coming into MFs which has now consistently hovering above Rs 13000 cr. There is a lot that has to unfold for Indian equity markets. What are your views?
Indian equity markets shall reflect the outperformance of the Indian economy over the global equivalents in the medium and long term. An ever-increasing SIP paves the way for a lot of retail participation to benefit from the overall performance of equities as an asset class.
How should one be playing the small & midcap theme in 2023. We have seen most flows coming into this category.
The smallcap has been a major underperformer in 2022 with double-digit negative returns against low positive returns from midcap and large cap.
The large companies have protected their earnings better than the mid and small-cap companies where the variance in performance was quite high.
Due to this there are attractive entry opportunities in large-cap companies. We hence expect this variance to continue in the first half of the calendar year. We would prefer to remain overweight large cap.
If someone plans to put Rs 10L now in 2023 – does it make sense to go all in or via the SIP route?
The methodology of Investment options between Lumpsum or SIP is always dependent on one’s ability to time the markets and approach the investment with discipline.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)