How Will the Portfolio Be Over the Next Few Years and Which Categories Will Do Very Well? Radhika Gupta Answers

How Will the Portfolio Be Over the Next Few Years and Which Categories Will Do Very Well? Radhika Gupta Answers

Radhika Gupta, MD & CEO of Edelweiss AMC, believes that the portfolio for a future India cannot only be a largecap centric portfolio. She highlights the need for a more balanced portfolio that includes large, mid, and small caps. Gupta points out that the Indian opportunity is truly multi-sectoral and multi-cap in nature, and a lot more balanced. She discusses the factors that make this decade potentially good for corporate India, including the migration from $2,500 GDP per capita to $5,000 GDP per capita, the young population, and the alignment of bottom-up corporate sector needs with top-down policies. Gupta also emphasizes the changing consumer trends and the growth of the digital economy in India. She mentions the large number of social media users in India and the formalization of the economy through initiatives like Aadhaar and UPI. Gupta believes that the digital economy is bringing access, efficiency, and spreading the story from India to Bharat. The access to credit is another important aspect she discusses, highlighting the significance of leverage and technology in ensuring access to formal credit for households, MSMEs, and corporates. Gupta notes that India is significantly under-levered compared to other parts of the world and that technology is playing a role in providing access to credit. She points out that the health of NBFCs and banks is in good shape, and fintech is expected to contribute 10-15% to the financial services revenue pool. Talking about corporate earnings, Gupta emphasizes that India is coming off an earnings low and the earnings season is surprising positively. She highlights the meaningful double-digit EPS for indices, good corporate balance sheets, and expanding corporate ROEs. Gupta also expresses her belief in the spirit of Indian entrepreneurship and discusses the animal instincts of the private sector. She mentions the high capacity utilization and the broad-based earnings resilience seen across sectors like financial services, manufacturing, and capital goods. In conclusion, Gupta suggests that the right approach while constructing a portfolio as an investor is to consider a balanced portfolio of large, mid, and small caps, given the multi-sectoral and multi-cap nature of the Indian opportunity.

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