A flat stock market return after 4 great years not a bad outcome: Sunil Singhania

A flat stock market return after four strong years is not necessarily a bad outcome, Abakkus Asset Manager’s Sunil Singhania said in an interview with Business Today. He noted that the past year offered few positive developments, and these were largely reflected in stock price performance. It was also, after a long time, a period when the Indian market underperformed its global peers, as well as other asset classes such as gold and silver.

Singhania said 2020-2024 was a great period for the domestic market. “When you have the good time, people do get carried away. Somewhere in the mid-2024, markets had started to get overvalued and it coincided with the election time and during election time, you know, the economy sort of slows down because we have the code of conducts on projects. September 2024 was a really bad quarter when the economy grew a mere 3 per cent,” Singhania said.

This coincided with multiple wars and tariffs. He said 25 per cent tariffs itself was bad and the US imposed another 25 per cent, ading that there was a risk-off trade due to currency movements. One reason why safe havens like gold, silver and Bitcoin have being doing well is because dollars movements have been like crazy.

But Singhania sees a silver lining. He said both the central bank, which is the Reserve Bank of India, and the government, are clearly pushing for growth. RBI infused more than Rs 10 lakh crore of liquidity in the system. There were Rs 1 lakh crore worth of income tax benefits and now Rs 1 lakh crore worth of GST benefits. Singhania said the 100 basis points rate cut meant EMIs would now be lower, which gives Rs 30,000-40,000 crore of additional funds at the hands of crore of Indians.   

Singhania’s interview was moderated by Siddharth Zarabi, Group Editor of Business Today, along with Aabha Bakaya, also from Business Today. 

The marker veteran said he tends to focus on profitable companies with reasonable ROCE, adding that he make investments as if he is partner in a business where there is growth and valuations are reasonable. 

“When there is growth, we don’t mind even paying higher valuations. But where there is no growth or low growth and high multiple don’t justify… Thankfully our projection came out pretty right in the past 5-6 years. Since 2019, we were saying there was bubble in quality and the best companies are not necessarily the best stocks,” Singhania said. 

He said there are already seen signs of growth coming back. Monsoons have been great and rural economy is thriving. “I think it’s all about just getting this tariff thing behind and we should start to looking at the markets with a lot of optimism,” he said.