Resilience of economy, strong flows to keep Indian equities preferred asset: Anand Rathi's Varun Saboo

Varun Saboo, Head - Equities, Anand Rathi Shares and Stock Brokers, sees double-digit returns for Indian markets this year. In an interview with MintGenie, he said that the resilience of the Indian economy coupled with strong flows will keep equities the most preferred asset. He advises investors to buy stocks with strong visibility for the next 1-2 years in terms of business outlook coupled with not very expensive valuations.

Edited excerpts:

Indian markets recovered in April after 4 months of being under pressure. Do you see this momentum continuing in May?

We have been bullish and continue to remain bullish going forward. The resilience of the Indian economy coupled with strong flows will keep Indian equities the most preferred asset.

Or can the remainder of the March quarter earnings spoil the mood?

Don’t really think March quarter numbers can spoil the mood even if the remainder of the numbers turn out to be a tad weaker. We remain extremely enthusiastic on demand across sectors going forward.

What sectors are you looking at, at the current juncture?

We are positive on two-wheelers, durables, financials and selective IT names.

Apart from equities, which other assets do you see surging in 2023 and would recommend to investors?

Difficult to see any other asset class doing as well as equities. However, I believe real estate could see good traction going forward led by immense wealth creation in the country.

Small & midcap stocks outperformed Nifty in April. What do you expect in May?

We expect largecaps to do well as well. Expect strength in midcaps to continue.

Can you sum up FIIs' activity in April and how are they placed for the month of May?

FIIs have been selling relentlessly for the last two years plus, sold more than ₹4 lakh crores in the last 2 years or so. We saw the selling funnel to have stopped in April, and expect inflows to get better going forward.

What checklist would you recommend to investors before buying a stock?

In our view, buying stocks with strong visibility for the next 1-2 years in terms of business outlook coupled with not very expensive valuations.

Overall in 2023, what trends should one look out for?

One must focus on consumerism at the current juncture. Would suggest buying discretionary plays as it would be a good option.

Do you see muted or double-digit returns in 2023?

We believe double-digit returns are quite possible in 2023.

One piece of advice for new investors.

Look at equities with at least a three-year-plus view. Buy businesses that have a track record and are looking promising for growth going forward. Any asset at a price is good, hence, one needs to bear in mind the price we are paying for a stock.