Fidelity Investment Tips : Signs of a gradual exit from the second round of corona of the economy are beginning to be seen in the profits of the companies. Even though inflation remains a challenge, the demand seems to be increasing. Especially rural demand has started increasing again. Nitin Sharma, Research Director and India Site Head, Fidelity International, says that with these positive signs of the economy, the expectation of the IT, Health, Consumer, Material and Auto sectors has increased. Both the operations and financial performance of these sectors will show improvement. Therefore, companies in these sectors can expect good returns from stocks.
Nitin Sharma, in a conversation with Financial Express Online’s Kshitij Bhargava, also told that what should be taken care of before investing money in the IPO of new economy companies like Zomato.
Good returns can be found in the stocks of these sectors
Nitin Sharma said that the second wave of Corona remained short. Also, the pace of vaccination has not had a very fatal effect on the economy. Although the fear of the third wave of COVID and rising inflation is a challenge for the economy, but in the meantime RBI has played an important role in maintaining the money flow in the market. With this the confidence of FII remains in the Indian market. FIIs have invested $ 34 billion here in the last one year, which is the highest after Brazil. All these factors will have an impact on the Indian market and the performance of IT, Consumer, Healthcare material and Auto sectors will be very good. The operations and financial performance of companies in these sectors are expected to shine.
Banks and NBFCs can also make withdrawals. The biggest challenge at this time is that most of the good companies in these sectors have discounted the coming positive phase and are trading at expensive valuations. On that front, there are good prospects in the oil and gas, metals and pharma sectors.
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Keep these things in mind while investing money in companies like Zomato
Nitin Sharma said that investors should keep some things in mind before investing in new economy companies like Zomato. Firstly, investors in these companies will have to give their investment a long time because the operating model of some of them may not have been fully established yet. Along with this, where is the market of each segment and what is the competition environment will also have to be monitored. Along with this, management quality is also an important thing. Investing in such IPOs has to be done very carefully as you will be expecting returns from these companies in the long run. This makes the valuation model very sensitive. Apart from this, attention has to be taken on the strength of the balance sheet, operating leverage and cash flow generation.
(The stock recommendations given in the story are those of the respective research analysts and brokerage firms. Financial Express Online takes no responsibility for the same. Investments in capital markets are subject to risks. Please consult your advisor before investing.)