Economy facing sectors like real estate, power & infra likely to excel in 2022, says Swastika Investmart MD Sunil Nyati

Sectors such as power, metal and real estate have given unprecedented returns in the past one year. Apparently, barring a few, almost majority of sectors have done exceedingly well. Some of them are even likely to do well in 2022. As per Stock Edge, S&P BSE Power, BSE Metal, BSE industrials, Nifty Realty and Nifty IT led the rally in the domestic equity market with 70%, 69.3%, 67.2%, 60.5% and 58% gains as on December 27, 2021, respectively. 

The massive returns generated by these indices were despite over 10 per cent corrections witnessed by the benchmarks Nifty50 and the S&P BSE Sensex from the all-time high in October.

See Zee Business Live TV Streaming Below:

The sectoral indices outperformed the headline indices by wide margin as returns clocked by Nifty and the Sensex during the same period stood at 24.3% and 22.1% respectively, showed Stock Edge.  

As sector specific action remains in the market, Sunil Nyati, MD, Swastika Investmart Ltd, says he is bullish on domestic economy facing sectors like Real estate, power & infra, Capital goods and banking.  

Which sectors should do well in 2022? What makes you bullish on these sectors?  

"If I talk about the real estate sector, then there is a turnaround story after 10 years of underperformance, where the last 5 years were very painful due to demonetization, NBFC crisis, RERA, etc. But things are looking very bright now—thanks to low-interest rates, stamp duty cuts, supportive government policies and consolidation in the industry due to RERA," said Sunil Nyati.  

He further said that power, infra, and Capital goods sectors were also coming out of 14 years of 'Vanvas'.  "The market has started the celebration and it is likely to continue for the next couple of years. There is a valuation comfort as well as strong growth outlook in these sectors. If the economy shows a strong recovery, then the banking sector should also do well and economy facing banks like SBI and ICICI Bank may outperform," he said.  

What will be the new theme going forward in 2022?
I believe wealth management is the new theme, which the market will bet on amid rising awareness about wealth creation. Technology has played an important role towards making people understand the value of creating wealth.  

Which sectors will lead in shaping wealth management?
The penetration of this segment is very low in India, therefore the opportunity is big for this industry. Insurance companies, AMCs, exchanges are part of this theme. The technology sector, the leader of this bull run may continue to do well.  

Any other sector that could surprise?  
Telecom sector is looking in a sweet spot amid weakness in the market, where Average revenue per user (ARPU) have bottomed out, rather we should say that they are on an upward trajectory and the worst is behind us for the sector, whereas there are multiple tailwinds to support the future growth. The recent price hike by all the players is a clear indication that there is no price war and the industry is ready for further tariff hikes. 

Bharti Airtel remains favourite from telecom space
The top two players Bharti Airtel and Reliance will remain our preferred bet, where Bharti is looking more lucrative than Reliance. If we talk about the Vodafone idea then the future is still looking blur, however, some recent developments put some life in the company. Telecom ancillary companies may also do well on the back of better industry outlook.

(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.)