“Given the fact that March onwards, you have seen a very strong capital market rebound, which is going to have a rub off impact on your earnings for the first quarter as well. All capital market entities are going to report better than estimated numbers. That was the case in the fourth quarter, when the markets were really down. So all in all, the capital market plays are a very good buy on it,” he added.
Sonthalia expects a shift from investment-led themes to consumption-driven ones, largely driven by the government’s push to boost disposable incomes, particularly for the middle class.
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Over the past two years, this segment had been strained by inflation and high taxes. However, with income tax savings of ₹1 lakh crore this financial year, a consumption multiplier effect is anticipated, especially in discretionary spending.
Rural consumption is also gaining traction, aided by a recovery in the rural economy and supportive monsoons. This will benefit sectors like travel, hotels, QSRs, personal vehicles, and health insurance—key areas within the consumer discretionary space.
Alongside this, consumption-based growth is likely to strengthen, creating investment opportunities across real estate, select private sector housing finance NBFCs, and public sector banks—many of which, he notes, are trading at attractive valuations.
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