India Is The Best Long-Only Market In The World, Says Gautam Trivedi

India is not impacted by the current geopolitical tensions in the Middle East, mainly due to continuous inflows from domestic investors, who are contributing through mutual funds and systematic investment plans, according Nepean Capital's Gautam Trivedi.

"Every time the DXY actually goes up as high as it has; 106, 107... This is typically followed by an outflow from emerging markets," Trivedi, co-founder and managing partner at Nepean Capital LLP., told BQ Prime's Niraj Shah.

People are worried not just about the prices of commodities and crude oil, but also about the possibility of the conflict expanding, potentially involving more countries in the Middle East. If this happens, the impact on global markets, especially in terms of stocks, could be significant and challenging, Trivedi said.

"My personal view is India is the best long-only market in the world. This is a great market to be buying stocks with a five to 10 year view," he said.

On the second-quarter earnings season, Trivedi said banks have done exceptionally well based on the results that have come out in the last 10 days

Many private sector banks are currently trading at very low multiples, making them attractive investment options, he said. "I think I would still put my money into private sector banks."

Information and technology companies have also seen some corrections, Trivedi said.

Trivedi raised concerns about non-banking financial companies, emphasising the growing level of competition within the sector. "So, I think you will see some degree of consolidation over the next five to 10 years in the NBFC space...You have now got a big daddy in town called Jio Financial Services. They also have pretty big plans."

In the Indian market, specific sectors like hospitality and building materials are dominated by mid- and small-cap companies. Sectors such as cement, information technology, and pharmaceuticals feature a mix of mid-, large-, and small-cap companies, Trivedi said.

According to him, the potential goes well beyond the confines of the BSE 500. This indicates a wide array of investment prospects outside the traditional market benchmarks.

The potential for discovering the right stocks, with right quality of management, best corporate governance, and impressive earnings growth is substantial in the Indian market, he said.

Indian market continues to witness a steady influx of new opportunities, with approximately 25 to 30 companies entering the market through IPOs each year. The landscape is evolving rapidly, with entirely new sectors emerging that were non-existent just half a decade ago, according to Trivedi.

"So the good news is new sectors are emerging. And I believe that the opportunity set is not just with the traditional Nifty 50 stocks, but the newer sectors that are emerging," he said.