UTI Asset Management Company Ltd hosted ‘The Colloquium’ on 18 Mar 21. The virtual summit featured a panel of experts who addressed issues related to ‘Investing in the post pandemic world’.
Vetri Subramaniam, Group President & Head - Equity UTI Mutual Fund, Nilesh Shah, Founder & CEO, Envision Capital and Bharat Shah, Executive Director, ASK Group came together for an equity-focused discussion. The discussion was moderated by Govindraj Ethiraj, Founder, Boom.
Here are some of the key highlights of the session:
- Large, mid or small - which one is a better bet?
The scale of business does not indicate good performance. There are certain mid-size and small-businesses that have been performing well, while some large businesses may struggle. One must trust the markets to weed out the fragile players. Quality and competitive businesses perform well. India’s start-up eco-system is vibrant and is expected to contribute to the incremental growth of the economy. Digitalization of businesses may not seek huge capital, but has enormous potential to create value. The focus must be on the value rather than the capital.
- The profit and GDP mismatch
While India’s GDP is forecasted to rise by 1% to 2% in 2022 as compared to 2020, the profits forecast like Nifty 50 is expected to be higher by ~40% as compared to the base of 2020. This is a near-term equivalence that will not be sustainable in the long run. Once the dust settles down, the long-term economic growth in real terms is expected to be 7% to 8%. Considering inflation of 3% to 4%, a nominal GDP of 11% to 12% seems a realistic picture on a sustainable basis. Accounting for the dynamism of the corporate sector, maybe 13% to 14% is a number to watch for. Some may incorrectly perceive investments as the race to the highest and the fastest, but investing is about being optimum and sustainable.The discipline to stay invested in the right avenue for the long-run has a far bigger implication on the investment outcome.
- Hopes on the pharmaceutical and technology sector
Taking into cognizance longer time duration, pharmaceutical and technology sectors are expected to perform and enjoy symbiotic existence. The pandemic has put tailwinds on health-related opportunities including pharmaceutical and diagnostic chains. On the other hand, technology is a great enabler and is means to an end. Further, businesses are anticipated to move towards the phygital mode of operations.
