Silver outlook stronger than gold, bullish on autos and festive demand: Devender Singhal – News Air Insight

Devender Singhal, Equity Fund Manager at Kotak Mahindra AMC, shared insights on asset allocation, commodity trends, and market outlook, highlighting a stronger case for silver, positive traction in autos, and improving earnings momentum in the coming quarters.

Current asset allocation

Speaking on ET Now, Singhal said Kotak’s multi-asset portfolio is currently weighted towards equities, with 65% allocation in equities, 20% in precious metals, and the balance in debt instruments. He noted that equities continue to remain the dominant driver, but precious metals play a significant role in risk diversification.

Silver vs. gold: A stronger case emerging

On the rally in bullion, Singhal pointed out that gold has risen nearly 40% year-to-date, while silver has surged faster due to industrial demand.

“The last month has seen an unprecedented move in both gold and silver, with 11% and 16% rise respectively. Silver is finding increasing usage in solar, EVs, and AI, making its long-term outlook stronger than gold,” he said.

Singhal stressed that while both metals remain attractive, silver has a more favorable demand-supply outlook, suggesting greater upside potential.

Auto sector outlook: Bullish on lower-end demand

Discussing equity allocations, Singhal highlighted autos as a key bullish bet.“We have exposure across four-wheelers, two-wheelers, and ancillaries. Specifically, we are more bullish on the lower end of the pyramid where demand had been weak post-Covid. The festive season has brought back good traction, and we expect sustained growth in this segment,” he explained.Exports, too, remain a structural growth driver for auto companies, he added.

Earnings outlook: Q2 disruptions, Q3 to see strong growth

On upcoming quarterly earnings, Singhal remained cautiously optimistic.

“Q2 earnings may see some disruption due to GST-related shipment issues in late September, but Q3 is expected to be much stronger. Broader market earnings should improve, led by consumption and exports,” he said.

Key takeaways for investors

• Silver preferred over gold due to rising industrial demand.
• Auto sector bullish, especially entry-level two- and four-wheelers.
• Q3 earnings expected to surprise positively, despite near-term Q2 disruptions.
• Balanced allocation strategy with 65% in equities, 20% in precious metals, and rest in debt.