Financials and infrastructure sectors to drive market rally

Sandip Sabharwal, an investment expert, shared his insights on the market and recent developments in Manappuram, a non-banking financial company (NBFC). He noted that Bain Capital's acquisition of joint control over Manappuram is a positive move. The company is well-positioned financially, and the investment should help reduce pressure for an initial public offering (IPO) for its microfinance subsidiary. Sabharwal believes that Manappuram’s stock could rise beyond the open offer price of ₹236. This is because the infusion of capital, about ₹4,300 crores, is significant and will support growth. He also mentioned that gold loans, a central part of Manappuram's business, are secure, which is good news for minority shareholders. Looking at the broader market, Sabharwal indicated that while there has been a market recovery, he does not expect a runaway bull market. He highlighted that initial market gains are often driven by short covering, but he sees pockets of growth, especially in financial and infrastructure sectors. Government projects in railways and defense are also beginning to gain momentum. Sabharwal is optimistic about consumer demand improving next year due to lower taxes and inflation. He anticipates a return of foreign investment in emerging markets as the dollar's value changes. However, he cautioned about potential tariffs on Indian industries, which could negatively impact some companies. In his view, infrastructure companies have a good chance of rebounding as interest rates decline. He expects capital goods and auto sectors to also see growth, particularly in lighter competition areas like two-wheelers. Overall, he believes that companies like Bharati and Reliance are well-positioned to boost market performance.