Stories
HSBC MF's Manghat: Private Banks Nearing Bottom, Mid & Smallcaps Offer Bigger Opportunities
- •Venugopal Manghat of HSBC Mutual Fund believes private sector banks are nearing the end of a weak phase, with improved liquidity and credit demand expected to drive recovery.
- •He remains constructive on midcap and smallcap stocks for the medium to long term, citing a conducive environment for smaller companies due to healthy liquidity and benign leverage.
- •Manghat identifies manufacturing, capital expenditure, consumer discretionary, healthcare, and financials as key market themes, emphasizing a bottom-up stock picker's market.
- •Investors are cautioned against chasing expensive industrial, defence, and select midcap stocks that have already priced in 18-24 months of future growth.
- •HSBC Mutual Fund is positive on non-lending financial businesses like asset managers and exchanges, expecting growth from rising financial savings and investment participation.
Key Questions Answered
Venugopal Manghat states that private sector banks are nearing the end of a prolonged weak phase and are close to their bottom, positioning them to see improvements as liquidity strengthens and credit demand picks up. He notes that the sector is benefiting from stronger FCNR(B) deposit inflows and attractive valuations.
HSBC Mutual Fund remains constructive on the medium to long-term outlook for midcap and smallcap stocks, supported by healthy liquidity, benign leverage levels, and India's expanding economy. Key themes driving the market include manufacturing, capital expenditure, consumer discretionary, healthcare, and financials.
Venugopal Manghat cautions investors against chasing expensive pockets of the market, noting that industrial stocks, defence companies, and select midcap names have already discounted 18 to 24 months of future growth. He recommends using market corrections to build positions rather than buying after sharp rallies.
