Why Mihir Vora is looking beyond valuations to find India's next market winners - Explained

Résumé détaillé

Trust Mutual Fund CIO Mihir Vora identifies financials, defence, capital goods and CDMO as areas with potential for long-term growth. He explains why earnings visibility, business scalability and valuations matter more than short-term market movements, while outlining the opportunities he sees across sectors and his outlook for Nifty earnings.

Investors looking for opportunities in the Indian stock market should focus on companies' future earnings potential rather than just their current valuations, according to Mihir Vora, Chief Investment Officer at Trust Mutual Fund. Vora believes sectors such as financials, defence, contract development and manufacturing organisations (CDMOs), capital goods and auto ancillaries offer opportunities as corporate earnings improve and businesses expand their capacities.

In an interview with CNBC-TV18, Vora said the Nifty could deliver 10-15% growth from current levels, supported by improving earnings prospects and more reasonable valuations following the recent market correction. His investment approach is centred on identifying companies with strong growth potential rather than making broad market or asset allocation calls.

The willingness to look beyond seemingly expensive valuations is particularly evident in his approach to defence and CDMO companies, where he sees a substantial opportunity to grow revenues over the next five years.

Financials are among the sectors where Vora sees opportunities following the valuation correction. He believes the traditional growth advantage enjoyed by private sector banks over public sector banks has narrowed, bringing their valuations closer.

Private sector banks earlier grew at around 25%, compared with 12-13% for PSU banks. That gap has now reduced, with both categories reporting growth of around 12-15%, while some banks are growing at 15-16%.

The narrowing growth differential has also led to a reduction in valuation differences.

"I would now place both of them at par," Vora said, adding that asset quality was not a concern for either category.

NBFCs are another area of interest. Although they are growing faster than banks, their valuations have become more reasonable following the recent correction. Vora believes private sector banks, PSU banks and NBFCs are now broadly comparable from an investment perspective.

He is also positive on…

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