Synopsis
Nilesh Shetty, Portfolio Manager at Quantum Advisors, sees limited opportunities due to high valuations and slowing earnings. They’ve focused on private sector banks and insurance but have trimmed holdings in public sector and auto stocks. With 16% cash levels, they expect this to rise if the market continues its upward trend while remaining cautious about frothy valuations. ETMarkets.com Nilesh Shetty , Portfolio Manager, Quantum Advisors, says they have found selective opportunities in private sector banks and some insurance companies. But generally, they have been either trimming or selling out of companies. They have trimmed most of their public sector holdings, reduced holdings in auto. Also, the cash levels have been higher. The portfolio which follows a value style currently has about 16% cash, which is slightly above their long-term averages and our sense is that it will move higher if the markets continue to move higher.
Help us with your take on the markets at this point in time because in 2024, Nifty has given a modest return of 8-9%. Going ahead in 2025, what kind of expectations are you building in and with respect to the valuations, what is your take there?
Nilesh Shetty: The Nifty is a narrow index of largecaps and it has given single-digit returns. But the small and midcaps have given close to 25% returns this year on the back of very strong returns over the last few years. Valuations are clearly expensive at a time when earnings are slowing down and this is specific to the small and midcap space where we believe valuations are extremely frothy, investors need to be careful.
The price-to-earnings
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