Stories
Largecap Indian Stocks Look Attractive After Recent Correction Says Kotak
- •Largecap Indian stocks have become attractive following recent market corrections, according to Pratik Gupta, CEO and Co-Head of Kotak Institutional Equities.
- •A sustained market recovery depends heavily on easing crude oil prices, softer global bond yields, and stronger corporate earnings.
- •Global investors remain cautious and underweight on India, viewing valuations and growth prospects relative to competing emerging markets.
- •Key preferred sectors include private sector banks, large NBFCs, telecom, hotels, domestic pharma, and select auto stocks.
- •FPI capital gains tax reforms are viewed as necessary plumbing to fix investment environments, though broader macroeconomic triggers are also required.
Key Questions Answered
A sustained market recovery will depend on easing crude oil prices, softer global bond yields, and stronger corporate earnings, according to Pratik Gupta of Kotak Institutional Equities. Lower oil prices and bond yields could trigger renewed foreign inflows into the Indian market.
Kotak prefers private sector banks with strong deposit franchises, large non-banking financial companies (NBFCs), telecom, hotels, domestic pharmaceutical companies, and select automobile stocks like commercial vehicles and tractors. Analysts are also constructive on the telecom sector due to improving industry structure, tariff-led ARPU growth, and rising free cash flow.
Pratik Gupta stated that tax reforms alone would not bring foreign money back to India, describing them as an essential part of the plumbing where leaks must be fixed first. While reducing the capital gains tax would improve India's competitiveness, foreign investors also require lower oil prices, easing bond yields, and stronger earnings growth.
