DSP MF expects this sector to sustain growth momentum for a few years
Dhaval Gada, Vice President of DSP Mutual Fund, emphasised the importance of a stock-specific, bottom-up approach to portfolio construction. He pointed out key holdings in the fund, such as Bajaj Finserv and REC, and emphasised expectations for strong momentum in corporate credit growth.
Dhaval Gada, Vice President of DSP Mutual Fund, is positive about the housing finance sector, particularly the prime and super prime segments.
“On the sector, we expect, growth moderation that we had seen in housing post COVID to sort of come back and being around the mid-teens kind of level and given the government's thrust on housing, we do expect this growth to sustain for a few more years,” Gada told CNBC-TV18.
Over the past 19 years, the BFSI (Banking, Financial Services, and Insurance) sector has shown impressive growth, with a compounded annual growth rate of over 17%.
This growth outpaced the Nifty index, a key benchmark for the Indian stock market.
The low level of financial services penetration in India presents significant opportunities for growth, particularly in sectors like non-life insurance and asset management, according to DSP Mutual Fund.
Read Here | BFSI expert pegs FY25 bank loan growth at 14-15%, sees no stress in rural market
In terms of housing finance companies, Gada highlighted the recent merger activity and identified a gap in the market for investments in prime or super prime housing spaces. He suggested that new offerings in this area could present attractive opportunities for investors, provided valuations remain reasonable.
Discussing public sector undertakings (PSUs), Gada emphasised the importance of a stock-specific, bottom-up approach to portfolio construction. He pointed out key holdings in the fund, such as Bajaj Finserv and REC, and emphasised expectations for strong momentum in corporate credit growth.
With government emphasis on capital expenditure (capex), Gada anticipates continued growth in this area, which he views favourably.
Additionally, Gada expressed positivity towards diversified non-banking financial companies (NBFCs).
“The other pocket that we are quite upbeat on is diversified NBFCs, where we think there is a case where with the uptick that we are seeing in GDP growth, last year also we saw a revision upwards and in the current year as well based on RBI's forecast, we are seeing an upward revision,” he noted.
Looking at the broader landscape, Gada sees value in large banks, considering them reasonably priced and capable of providing stability to investment portfolios. He expects these banks to at least match market returns, if not surpass them by a few percentage points.
Also Read | Why Vetri Subramaniam remains positive on BFSI amid tightening regulations
“On the sector, we expect, growth moderation that we had seen in housing post COVID to sort of come back and being around the mid-teens kind of level and given the government's thrust on housing, we do expect this growth to sustain for a few more years,” Gada told CNBC-TV18.
Over the past 19 years, the BFSI (Banking, Financial Services, and Insurance) sector has shown impressive growth, with a compounded annual growth rate of over 17%.
This growth outpaced the Nifty index, a key benchmark for the Indian stock market.
The low level of financial services penetration in India presents significant opportunities for growth, particularly in sectors like non-life insurance and asset management, according to DSP Mutual Fund.
Read Here | BFSI expert pegs FY25 bank loan growth at 14-15%, sees no stress in rural market
In terms of housing finance companies, Gada highlighted the recent merger activity and identified a gap in the market for investments in prime or super prime housing spaces. He suggested that new offerings in this area could present attractive opportunities for investors, provided valuations remain reasonable.
Discussing public sector undertakings (PSUs), Gada emphasised the importance of a stock-specific, bottom-up approach to portfolio construction. He pointed out key holdings in the fund, such as Bajaj Finserv and REC, and emphasised expectations for strong momentum in corporate credit growth.
With government emphasis on capital expenditure (capex), Gada anticipates continued growth in this area, which he views favourably.
Additionally, Gada expressed positivity towards diversified non-banking financial companies (NBFCs).
“The other pocket that we are quite upbeat on is diversified NBFCs, where we think there is a case where with the uptick that we are seeing in GDP growth, last year also we saw a revision upwards and in the current year as well based on RBI's forecast, we are seeing an upward revision,” he noted.
Looking at the broader landscape, Gada sees value in large banks, considering them reasonably priced and capable of providing stability to investment portfolios. He expects these banks to at least match market returns, if not surpass them by a few percentage points.
Also Read | Why Vetri Subramaniam remains positive on BFSI amid tightening regulations
(Edited by : Shweta Mungre)
First Published: Jun 7, 2024 9:26 AM IST
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