Rahul Jain, President, and Head, Personal Wealth, Edelweiss Wealth Management said that Budget 2022 would be investment-led with a focus on building roads, infrastructure, metros, and so on.

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In an interview with Zeebiz's Kshitij Anand, Jain said the December earnings season has been good, and it will continue to remain so. There could be some margin pressure which would also normalize in a few quarters. Edited excerpts:

Q) Global headwinds seem to have gripped the Indian market. What is keeping the market volatile, and will the Budget act like a booster shot for Indian markets?

A) We all know that the Global markets have a strong impact on the Indian market and they will continue to do so.

We believe that due to volatility in global data (such as PMI, GDP), reduction in Liquidity, and recent Ukraine-Russia crises, the volatility would continue.

Budget 2022 can provide some respite but ultimately the global events will define the market trend.

Q) What are your expectations from Budget 2022? Do you think government will be able to meet the fiscal deficit target?  

A) Budget 2022 would be investment-led with a focus on building roads, infrastructure, metros, and so on. This investment would eventually lead to CAPEX and markets revival.

Q) What are your expectations from Rail Budget?

A) Firstly, they will try to close the older projects. And bring in new investments in few segments such as Signalling and Automatization. Investment in new metros and bullet trains also can be discussed.  

Q) December quarter earnings have been a mixed bag. What are your expectations from the earnings cycle in 2022?

A) According to me, the earnings season has been good, and it will continue to remain so. There could be some margin pressure which would also normalize in a few quarters.

Q) The big theme which has started to play out is the revival of Capex cycle. From a portfolio standpoint – how should one play this theme across sectors?

A) Yes, CAPEX is a big theme. And when CAPEX revives the entire economy does well. Ideally, it can be played through road, transferor companies.

Q) Value or growth – which theme will pick momentum in 2022?

A) It is always the growth theme which we prefer. Sectors such as infrastructure, real estate, and eventually banking will do well.

Q) We saw plenty of stocks creating wealth in 2021, while many failed to impress. Should one look at stocks coming out of quarantine because of lockdowns/curfew?

A) Yes, we can look at the themes such as entertainment, hotels and so on.

(Disclaimer: The views/suggestions/advices expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)