By soumyaranjanb447 
According to Jaspreet Singh Arora, industries like metals, cement, chemicals, and NBFCs are not the best choices for 2025.
In an interview with Moneycontrol, Jaspreet Singh Arora, the CIO at Equentis Wealth Advisory Services, stated that “BFSI, consumer discretionary, pharmaceuticals, commodities, and power (particularly renewable energy and infrastructure) are promising micro sectors to consider, while building a portfolio with a couple of years’ perspective.”
He thinks that industries that have underperformed recently, such as metals, cement, chemicals, and NBFCs, may outperform in 2025 because of their current low valuations and the potential for a market correction or rotation into undervalued sectors.
Furthermore, equity markets are less worried about US tariffs, according to Jaspreet, who has worked in the Indian capital markets for more than 18 years.
Do you believe that if Q4 FY25 earnings are disappointing, the current rally might end?
It depends. The current rally is being driven by more than just earnings. Although it is only one piece of the puzzle, a number of factors will be involved, such as the better outlook for the fourth quarter of FY2025.
A weakening of crude oil prices could reduce inflationary pressures, which would benefit the manufacturing and logistics industries, and a declining US dollar index could increase emerging market stocks and commodities.
A more favorable environment for borrowing and investment will probably be created by rising expectations of future interest rate reductions by central banks, which will boost corporate profits and economic growth.
Many stocks now have attractive valuations as a result of the significant decline in stock prices prior to this rally, drawing in investors looking for possible deals and chances for future gains. The current market rally is being driven by the environment that these factors have created.
If you were currently constructing a portfolio with a few years’ perspective, where would you place your bets?
I would advise giving top priority to businesses with solid financials and significant growth potential if we were constructing a portfolio with a few years’ time horizon. Strong return ratios (ROE, ROA), consistent cash flows, high earnings visibility (over 20% growth), and capable management are important components.
Promising microsectors to think about include BFSI, consumer discretionary, pharmaceuticals, commodities, and power (particularly infrastructure and renewable energy). But since investing always entails risk, careful consideration and financial guidance are essential before making any choices.
Do Indian markets currently worry about US tariffs?
US tariffs don’t worry Indian markets as much. A drop in earnings growth, a weakening rupee, high valuations, and frequent selling by foreign institutional investors (FIIs) have been the main issues over the last six months.
The possible external threat of US tariffs has not had as much of an impact on market sentiment as these internal factors. The performance of Indian companies and the state of the domestic economy are the main concerns of the market, even though the US tariffs may have a negative impact on particular sectors or industries.
In the upcoming quarters, do you think the biggest economy in the world will slow down?
Indeed. Global economic growth has slowed, according to a number of sources, including the World Bank, CNBC, and the International Monetary Fund. Advanced economies are particularly affected.
This slowdown may be caused by a number of factors, including geopolitical tensions, high interest rates, ongoing inflation, trade disruptions brought on by the Trump tariff wars, and the ongoing labor challenges.
Additionally, the US economy’s growth estimate for 2025 has been downgraded by the Federal Reserve from 2.1% to 1.7%.
Do you think the Fed will only lower interest rates twice in 2025? How do you interpret the most recent Fed commentary?
Indeed, we anticipate two rate reductions in the remainder of 2025. There is a remote possibility of a third rate cut, though. Higher import tariffs may cause the US’s persistent inflation to spike after April, necessitating another rate cut and making the Fed’s efforts to control price stability and economic growth even more difficult.
For 2025, what is your contrarian wager?
The go-to sectors will primarily be those that have underperformed in recent years. Metals, cement, chemicals, and NBFCs are a few of these industries. Because of their current low valuations and the potential for a market correction or rotation into undervalued sectors, it is thought that these sectors may outperform.
Disclaimer: The views and investment tips expressed by investment experts on The Times of Dalal Street are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.