According to Aditya Gaggar of Progressive Shares, there may be a comeback in the IT industry from the fourth quarter of last year

 According to Aditya Gaggar of Progressive Shares, there may be a comeback in the IT industry from the fourth quarter of last year

The first indications of an IT industry rebound, according to Aditya Gaggar, Director of Progressive Shares, won't be seen until Q4FY24 or Q1FY25. He suggested looking at the banking, infrastructure, auto, pharma, and chemicals industries while investing in an interview with Mint. He emphasized that the market is more stock-specific than sector-driven, however.

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What do you think about the Q2 financial results of IT companies? At this time, should we steer clear of IT stocks?

Over the last two to three months, order inflow has increased across IT businesses, but a slowdown in project-based business is impeding the development of the whole sector.

Results for the second quarter are anticipated to be modest due to the macroeconomic scenario's uncertainty, which impacts on discretionary expenditure (as previously witnessed via the major names). 

It has been anticipated that the industry would rebound in the next quarters (deal wins indicate that predicted revenue growth for FY25E will be positive), but it is still best to wait and see because of the volatility in macroeconomic circumstances. 

According to our assessment, the first indications of a rebound won't be seen until Q4FY24 or Q1FY25.

What opinions do you have on the mid- and small-cap space? Since April of this year, both the BSE Midcap and Smallcap indexes have seen monthly gains. How far will they have to travel?

Despite the volatility and global uncertainty reaching their height in 2023, the mid and small-cap indexes outperformed the bigger rivals (observing a rise of 30-35%). 

Whether this rise will continue or not is more uncertain (because every time a downturn has been anticipated, there has been an upward advance driven by stronger inflows), but it is certain that this area has always been about investing in high-quality companies. 

We have been recommending recording profits for those who have invested with us and received a nice return during the current surge, making it a cost-free investment. In light of the current intermittent declines, new investments are advised.

When do you think the Nifty 50 will reach a new record high? What may cause the market to reach a new record high? What is the index's end-of-year aim for you?

As the markets absorbed the bad news from the macro front, they were rangebound. Technically, a breakthrough through the Cup and Handle pattern (continuation formation) would be regarded if the Nifty 50 rose over the level of 19,850. The goal, in the event of a breakthrough, is set at 20,350.

Is it time to reduce exposure to stocks and purchase safe-haven assets in light of the present geopolitical and macroeconomic conditions?

Investor confidence has been impacted by the rising frequency of periodic global uncertainty. 

In India specifically, a respectable domestic inflow that has been constantly witnessed in the system has assisted in maintaining the liquidity, providing chances for investors to use the buy on dips technique. 

Profit booking at pre-determined increases could be a preferable alternative to reducing equity risk. 

Although we must be ready for volatility, the market seems to remain rangebound and does provide opportunities for participation, so it's really not that big of a deal. 

Any diversified portfolio should include safe-haven investments; they shouldn't merely be a place to hide during bad weather.

Why are local institutional investors purchasing Indian shares while overseas portfolio investors are selling? Do you anticipate this pattern to hold over the remainder of the year?

According to the previous scenario, foreign portfolio investor (FPI) flows were surging for the Indian markets, resulting in new highs for the indexes. 

On the other hand, it was the DII that remained cautious sellers. 

The US dollar's strengthening, higher bond rates, and increasing crude oil prices, all of which had a negative effect on the FPI flow into Indian markets, were blamed for the turnaround. 

This situation is anticipated to continue until the Fed desk provides some clarification and the other macro issues have settled. 

Despite the ongoing selling by FPIs and FIIs, domestic institutional investors (DIIs) have been consistently purchasing, pushing the markets higher. 

The conviction is undoubtedly here to stay (betting on the Indian economy's bright future), and once the concerns are resolved, the FPI should gradually return to its fundamentals.

In this market, where is the money? Which industries pique your interest for the next one to two years?

Instead of a sector-driven market, it is more stock-specific. Generally speaking, some areas to invest in include banking, infrastructure, auto, pharma, and chemicals. 

We have always taken a bottom-up approach to investing and believe in stock-specific investments since we bet on the particular investment reason rather than a cycle. 

From a long-term viewpoint, we would examine equities like Ultramarine Pigments, Advanced Enzymes, Tatva Chintan Pharma, HBL Power, FDC, Bharat Rasayan, etc.