Capex To Drive Earnings Upgrades, Normalise Valuations In 2024, Says Andrew Holland

Public and private capex is expected to boost earnings and prompt upgrades in the coming year, normalising valuations, according to Andrew Holland.

India experienced a hat-trick of positive news in better-than-expected state election results for the BJP, robust GDP figures, and the RBI raising its growth forecast in the recent monetary policy meeting, Holland, chief executive officer of Avendus Capital Public Markets Alternate Strategies, told NDTV Profit.

India's benchmark Sensex has risen nearly 18% so far this year, and the boarder markets outperformed. That has prompted concerns about frothy valuations.

At the moment, the country is a popular choice for investments, while China faces less enthusiasm, Holland said. However, if China introduces a significant stimulus and addresses property concerns, investor sentiment might shift, he said. "We can actually see flows going towards China as it is a cheap market."

For the upcoming quarter, Holland's focuses on large caps. His will be betting on banking, information technology, and metals sectors. "Banking sector will grow along with the economy and this sector will continue to do better."

India is witnessing a consumption boom, with luxury and premiumisation in focus, Holland said.

"Several research reports indicate that these (premiumisation-focused) companies are approaching profitability, and this trend is here to stay," he said. "The younger generation heavily engages with these new age companies."

The integration of artificial intelligence will bring significant changes and India has the potential to encompass this substantial transformation and excel in the evolving landscape, Holland said.