“If you don’t go anywhere for a year, you automatically get 12–15% cheaper — that’s the beauty of markets,” Somaiyaa told ET Now, adding that the starting point for the next Samvat looks better than last year’s.
A tale of two halves: near-term caution, long-term optimism
Somaiyaa expects the next few months to remain clouded by global uncertainty — from US tariffs to geopolitical tensions — but sees clearer skies in the second half of the year.
“The next three to six months could look a lot like what we’re seeing now — external uncertainty holding us back. But once we cross that hump, the second half should look much better,” he said.
Steady, not spectacular growth ahead
On the domestic front, Somaiyaa points out that India’s fundamentals remain intact. GDP growth has improved from around 5.4% last year to the 6.5–6.9% range, while corporate earnings have moved from flat to high single digits.
“FY27 could see earnings growth in the low double digits, maybe around 12–13%. It’s not a blowout performance, but it’s an improving trend,” he noted.
He believes that credit expansion, government spending, and possibly the 8th Pay Commission could give a consumption boost in the coming quarters.“The cleanup of the last decade is behind us. Now, both the RBI and the government seem to be pushing for an expansionary cycle,” Somaiyaa added.
No clear sector winners — time to go bottom-up
Unlike past years when one or two themes dominated, Somaiyaa feels this is a bottom-up investor’s market.
“There’s no clear winner right now. Diversified funds and bottom-up stock pickers are doing better than single-sector bets,” he explained.Still, he sees potential in banking, driven by credit offtake; manufacturing, especially import substitution; and even tech, which he calls a “contrarian play”.
“When everyone says tech is not the place to be, that itself is a contra indicator,” he quipped.
SIPs show resilience, but some fatigue may set in
Despite a flat market, India’s mutual fund industry continues to see record inflows. SIP contributions crossed ₹29,000 crore for the first time, showing steady investor discipline.
“There’s now a critical mass of investors who understand how SIPs work,” Somaiyaa said.
However, he cautioned that new investors might feel impatient if markets stay rangebound. “After 12 instalments, when people see no growth, regret can set in — they start thinking gold or fixed deposits would have been better. But this is precisely the time to stay the course,” he advised.
‘Consistency matters more than flashy performance’
For new investors, Somaiyaa recommends avoiding lump-sum investments for now. “If you’re entering today, stagger your investments over six months,” he suggested.
He also underscored the importance of the Information Ratio (IR) — a key performance metric that will now be disclosed by all mutual funds, as mandated by SEBI.
“High alpha is great, but consistency matters more,” he explained, likening it to cricket.
“One batsman may score 200 one day and then get ducks the next three innings. Another may consistently make 30s and 40s. The second one is more reliable — that’s what the Information Ratio tells you.”
as a Reliable and Trusted News Source