Market Outlook 2020-2021

Market Outlook 2020-2021

Pawan [email protected]

Copyright © 2020 www.ipfs.co.in

General Concern of Investors

2

Covid – Impact

on Business

specially

MSME

India -China

Boarder

Tension

USA Election

Outcome

uncertainty

Corporate

profitability will

be poor or

subdued

hence NPA will

rise, Huge Job

Loss

Stress in

Banking

sector due to

Moratorium

extension and

possible

future defaults

PE levels are

at all-time

highs

Value investing is

failing for last

three years and

Growth investing

is becoming

expensive

GDP Out

look is weak

as Fiscal

deficit will

increase

Inflation is huge

risk to growth as

supply side has

shrunk vs

demand which

is constant

Market is rising

due to excess

liquidity rather

than

fundamental

which are weak


Covid Impact on Sectors

BeneficiariesPharma

I.T

Telecom

Specialty Chemicals

FMCG

Agriculture

Defense due to Indo –China

On line Food Delivery

Life & General Insurance

DisruptionsHospitality

Airlines

Fashion, Media, Textile

Banking, NBFCs

Oil Marketing Companies

Industrial Goods

Metals

Passenger Auto

Industrial Goods

3


Nifty Weight across Sectors Outlook

Nifty Sector Weightage Short term Long Term

Financial Services 34.95% Weak Stable

Oil & Gas 15.75% Weak( EX-RIL) Stable

IT 15.27% Strong Strong

Consumer Goods 12.17% Stable Stable

Automobile 5.82% Stable Stable

Pharma 2.98% Strong Strong

Telecom 2.90% Stable Stable

Construction 2.39% Weak Stable

Metals 2.34% Stable Strong

Cement & Cement Products 2.04% Stable Strong

Power 1.92% Stable Stable

Fertilizers & Pesticides 0.58% Strong Strong

Services 0.55% Stable Stable

Media & Entertainment 0.38% Stable Stable


Index 1M 3M 6M YTD 1Y 2Y 3Y 4Y 5Y 10Y

NIFTY BANK 5.48% 5.87% 19.08% -26.27% -15.44% -6.63% -2.66% 22.37% 34.86% 90.28%

NIFTY IT 19.15% 42.64% 74.43% 41.84% 44.90% 52.71% 104.04% 116.16% 90.89% 230.18%

NIFTY PHARMA 7.44% 20.67% 38.11% 51.17% 66.99% 27.60% 26.91% 5.26% -7.30% 155.72%

NIFTY FINANCE 5.68% 4.50% 18.23% -20.38% -9.24% 9.99% 15.36% 45.05% 60.00% 131.68%

NIFTY FMCG -3.06% -2.59% 3.70% -0.32% -1.29% 6.64% 17.86% 38.54% 47.54% 223.64%

NIFTY MNC 0.11% 4.83% 18.19% 2.35% 6.04% 8.27% 5.31% 33.90% 47.96% 170.63%

NIFTY SERVICES 7.84% 11.00% 28.67% -8.94% 0.26% 12.30% 20.96% 44.83% 50.20% 115.57%

NIFTY ENERGY -7.45% 0.38% 23.09% -7.25% -4.87% 3.59% 8.07% 46.33% 85.17%-

NIFTY INFRA -3.17% 0.53% 23.02% -4.76% -2.39% 7.11% -6.42% 9.28% 4.78% -

NIFTY REALTY -0.86% 3.40% 14.72% -28.62% -13.83% 1.69% -24.35% 2.21% 17.54%-

NIFTY PSU

BANKS

-9.11% -12.02% 0.64% -48.08% -39.51% -51.53% -56.72% -58.85% -58.71% -73.69%

NIFTY PSE -9.97% -10.75% -4.76% -31.20% -30.36% -34.39% -46.63% -38.78% -29.22% -46.96%

NIFTY

CONSUMPTN

-1.23% 3.55% 13.83% 2.43% 3.78% 10.44% 12.29% 28.38% 45.08% 166.08%

NIFTY AUTO 1.83% 15.07% 45.51% -1.77% 9.54% -10.81% -26.82% -21.61% 0.49% 98.22%

NIFTY METAL -6.02% 7.83% 31.39% -20.01% -4.12% -34.82% -40.11% -17.32% 19.78% -52.69%

NIFTY MEDIA -6.86% 10.99% 37.33% -15.83% -11.08% -40.86% -49.79% -51.43% -37.08% -20.22%

NIFTY

COMMODITY

-2.06% 7.52% 28.18% -9.00% -3.35% -9.71% -20.36% -1.32% 30.21% -4.87%

NIFTY CPSE -7.88% -9.03% -5.47% -32.88% -31.76% -40.04% -49.62% -44.06% -39.15%

Sector Performance


G-Sec Vs Inflation Vs Fixed DepositDate Gsec-10yr

31/12/2002 6.07

31/12/2003 5.13

31/12/2004 6.55

31/12/2005 7.11

31/12/2006 7.61

31/12/2007 7.79

31/12/2008 5.26

31/12/2009 7.59

31/12/2010 7.92

31/12/2011 8.57

31/12/2012 8.05

31/12/2013 8.83

31/12/2014 7.86

31/12/2015 7.76

31/12/2016 6.52

31/12/2017 7.33

31/12/2018 7.37

31/12/2019 6.56

30/09/2020 6.05

Date Inflation Rate (%)

31/12/2002 4.30

31/12/2003 3.81

31/12/2004 3.77

31/12/2005 4.25

31/12/2006 5.80

31/12/2007 6.37

31/12/2008 8.35

31/12/2009 10.88

31/12/2010 11.99

31/12/2011 8.86

31/12/2012 9.31

31/12/2013 10.91

31/12/2014 6.35

31/12/2015 5.87

31/12/2016 4.94

31/12/2017 2.49

31/12/2018 4.86

31/12/2019 7.66

30/09/2020 6.70

Fixed Deposit Rates since 2002 -2020

Share in the Overall Market Cap (%)Share in

Overall MtSmallcap space looks attractive from valuations point of viewCa

Share in the Overall Market CapSlide Observation

Share in the Overall Market Cap (%)

p (%)

Index 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Jun-20 Jul-20 Aug-20 Sep-20

Top-100

79 75 74 71 79 77 78 79 78 81 75 74 72 65 70 74.5 75.1 73.9 74.0

101-250

11 12 12 13 11 12 13 13 14 13 14 15 15 16 16 15.5 15.2 15.7 15.6

Above 250

11 13 14 16 10 11 9 8 8 6 10 11 14 18 14 9.9 9.7 10.4 10.4

Share in the Overall Market Cap (%)

Smallcap space looks attractive from valuations point of view


FII VS DII Investing Activity

25

• Foreign Inst Investors • Domestic Inst Investors


How MFs performed from peak to low n currentDate Nifty Level Date Low Date Current Level/ NAV 23.03.2020 to 01.10.2020 14.01.2020 to 01.10.2020

Nifty Mid Cap 100 14.01.2020 17651.65 23.03.2020 10990 01.10.2020 17107.95 56% -3%

SBI Magnum Mid Cap Fund 14.01.2020 73.4108 24.03.2020 49.45 01.10.2020 74.98 52% 2%

DSP Mid Cap Fund 14.01.2020 59.074 23.03.2020 43.86 01.10.2020 62.07 42% 5%

PGIM India Midcap Fund 14.01.2020 18.87 23.03.2020 13.01 01.10.2020 22.56 73% 20%

Franklin India Prima fund 14.01.2020 985.0483 23.03.2020 646.0746 01.10.2020 924.2217 43% -6%

IDFC - Sterling Value Fund 14.01.2020 49.33 23.03.2020 28.53 01.10.2020 45.02 58% -9%

Date Nifty Level Date Low Date Current Level/ NAV 23.03.2020 to 01.10.2020 14.01.2020 to 01.10.2020

Nifty Small Cap 100 14.01.2020 6164.85 23.03.2020 3372.65 01.10.2020 5861.15 74% -5%

SBI Small Cap Fund 14.01.2020 54.8179 24.03.2020 38.06 01.10.2020 58.77 54% 7%

Nippon India Small Cap Fund 14.01.2020 40.8021 24.03.2020 25.24 01.10.2020 42.23 67% 3%

DSP Small Cap Fund 14.01.2020 56.762 24.03.2020 36.84 01.10.2020 61.02 66% 8%

franklin India smaller companies fund 14.01.2020 51.8216 24.03.2020 31.69 01.10.2020 48.03 52% -7%

L&T Emerging Businesses Fund 14.01.2020 23.683 23.03.2020 14.008 01.10.2020 22.276 59% -6%


Nifty Large & midcap 250 14.01.2020 6185.84 23.03.2020 3894.57 01.10.2020 5966.7 53% -4%

Nippon India Focused Equity Fund 14.01.2020 48.3282 23.03.2020 29.36 01.10.2020 44.41 51% -8%

DSP Focused Fund 14.01.2020 26.202 23.03.2020 15.92 01.10.2020 23.53 48% -10%

Franklin India Focused equity Fund 14.01.2020 43.1017 23.03.2020 26.96 01.10.2020 35.83 33% -17%

SBI Focused fund 14.01.2020 155.6019 23.03.2020 109.2 01.10.2020 144.72 33% -7%


Nifty Pharma 14.01.2020 8117 23.03.2020 6432.3 01.10.2020 11822.9 84% 46%

Nippon India Pharma Fund - G 14.01.2020 154.6545 23.03.2020 130.37 01.10.2020 226.78 74% 47%

SBI Healthcare Opportunities Fund -G 14.01.2020 121.7657 23.03.2020 102.78 01.10.2020 177.85 73% 46%

DSP Healthcare Fund -G 14.01.2020 11.233


Nifty IT 14.01.2020 16362.35 23.03.2020 11179.6 01.10.2020 20110.4 80% 23%

Franklin India Technology Fund G 14.01.2020 172.873 23.03.2020 125.11 01.10.2020 215.24 72% 25%

SBI Technology Opportunities Fund R-G 14.01.2020 69.6791 23.03.2020 50.5 01.10.2020 82.83 64% 19%


Nifty 50 14.01.2020 12362.3 23.03.2020 7610.25 01.10.2020 11416.95 50% -8%


SIP Magic 5yrs

27

A Systematic Investment Plan Presentation As on 01-01-2020Scheme Value & Return (4 Yr)

Total Investment : 01/01/2020 %

Franklin - India Feeder Franklin US Opp (G) 6,75,041 17.2

Franklin - India Technology Fund (G) 6,08,446 11.9

Invesco - India Financial Services Fund Ret (G) 6,69,519 16.8

Invesco - India Infrastructure Fund (G) 5,43,527 6.2

Invesco - India PSU Equity Fund (G) 5,33,524 5.2

Mirae - Asset Great Consumer Fund Reg (G) 6,30,986 13.7

Nippon India - Banking Fund (G) 6,14,091 12.3

Nippon India - Consumption Fund (G) 5,28,961 4.8

Nippon India - Pharma Fund (G) 5,21,142 4.1

A Systematic Investment Plan Presentation As on 08-10-2020Scheme Value & Return (4 Yr)

Total Investment : 08/10/2020 %

Franklin - India Feeder Franklin US Opp (G) 10,17,459 24.5

Franklin - India Technology Fund (G) 9,47,269 21.4

Invesco - India Financial Services Fund Ret (G) 6,38,719 4.7

Invesco - India Infrastructure Fund (G) 6,13,083 3.0

Invesco - India PSU Equity Fund (G) 5,73,540 0.3

Mirae - Asset Great Consumer Fund Reg (G) 7,03,130 8.7

Nippon India - Banking Fund (G) 5,16,181 -4.1

Nippon India - Consumption Fund (G) 6,48,607 5.3

Nippon India - Pharma Fund (G) 9,30,733 20.6


Time is more important than Timing

28

Date 2014 Date Previous all time highDate Date 52 week Low 30.9.2020 Current level Gain from peak to current levels Gained Since 2014 til date

Nifty Auto 2014 6874 11974 29.10.201907.04.2020 4452.2 7908 -34% 15.04%

Nifty Small Cap 100 6404 10.04.2015 9535 27.01.202024.03.2020 3202.9 5822 -39% -9.09%

SBI Small Cap Fund 26.04.2014 16.2453 10.04.2015 30.7224 24.03.2020 38.0581 58.4857 90% 260.02%

Nippon India Small Cap Fund 26.04.2014 13.8657 10.04.2015 25.3238 27.01.202024.03.2020 25.0388 42.1595 66% 204.06%

DSP Small Cap Fund 26.04.2014 21.017 10.04.2015 41.982 24.03.2020 36.836 60.034 43% 185.64%

Nifty Pharma 26.04.2014 8135 10.04.2015 13505 18.09.202012.03.2020 6242.85 11772 -13% 44.71%

Nippon India Pharma Fund - G 26.04.2014 90.3013 10.04.2015 143.0966 18.09.202012.03.2020 141.8806 225.4832 58% 149.70%

SBI Healthcare Opportunities Fund -G 26.04.2014 82.0101 10..04.2015 148.487 12.03.2020 113.9027 117.6851 -21% 43.50%

Nifty Mid Cap 100 14.07.2014 10520 16.01.2018 21297 27.01.202024.03.2020 10749.95 16983 -20% 61.44%

SBI Magnum Mid Cap Fund 14.07.2014 41.77 16.01.2018 86.7972 24.03.2020 49.4462 74.5664 -14% 78.52%

DSP Mid Cap Fund 14.07.2014 27.12 16.01.2018 58.809 24.03.2020 41.908 61.563 5% 127.00%

Nifty 50 26.06.2014 7493 03.06.2019 12088 20.01.202024.03.2020 7511.1 11247.55 -7% 50.11%

Nippon India Focused Equity Fund 26.06.2014 20.1994 03.06.2019 48.9931 24.03.2020 29.5996 43.9365 -10% 117.51%

DSP Focused Fund 26.06.2014 13.517 03.06.2019 24.092 24.03.2020 16.171 23.264 -3% 72.11%

Franklin India Focused equity Fund 26.06.2014 21.216 03.06.2019 43.5698 24.03.2020 26.9818 35.1593 -19% 65.72%

SBI Focused fund 26.06.2014 71.7235 03.06.2019 147.8847 24.03.2020 110.7483 143.1266 -3% 99.55%

Nifty Bank 01.07.2014 15321 18.02.2016 14298 27.12.202023.03.2020 16116 21451.8 50% 40.02%

Nippon India - Banking Fund 01.07.2014 149.8503 18.02.2016 142.643 23.03.2020 152.5422 194.2918 36% 29.66%

Nifty IT 26.06.2014 9579 19.02.2015 12723 18.09.202018.03.2020 10991.25 19951.3 57% 108.28%

Franklin India Technology Fund G 26.06.2014 93.0574 19.02.2015 121.438 18.03202 129.2366 215.2448 77% 131.30%

ICICI Pru - Technology Fund 26.06.2014 56.01 19.02.2015 43.78 18.03.2020 42.75 80.93 85% 44.49%

Nifty Metal 23.06.2014 3309 17.09.2018 3705 15.01.202023.03.2020 1480.7 2242.55 -39% -32.23%

Nifty 500 26.04.2014 6065 31.08.2018 9992 17.01.202024.03.2020 6151.6 9341.75 -7% 54.03%

Nifty Bank PSU 23.06.2014 3715 21.01.2015 4407 28.11.201919.05.2020 1087 1277.4 -71% -65.62%

Technical View

Gold Looks to have topped out at Rs.58000 levels & into consolidation phase between Rs.45000- Rs 56000 over next 2 years

2012 2013 2014 2015 2016 2017 2018 2019 2020

20000

25000

30000

35000

40000

45000

50000

55000

0.0%

23.6%38.2%50.0%61.8%

100.0%

161.8%

261.8%

423.6% GOLD-1M (50,600.00, 50,600.00, 50,100.00, 50,331.00, -139.000)

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

4000

4500

5000

5500

6000

6500

7000

7500

8000

8500

9000

9500

10000

10500

11000

11500

12000

12500

13000

*Nifty has Surely made a Long Term Bottom 7610.

In short term Index may consolidate between

10500 -11800 till Dec 2020

*Long Term Final Bottom is seen at 10000 nifty levels

Upper Range is fixed at 12800 for entire FY 21-22

NIFTY 50 (11,487.80, 11,578.05, 11,452.30, 11,503.35, +86.3994)

Copyright © 2020 www.ipfs.co.in2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

10000

15000

20000

25000

30000

0.0%

23.6%

38.2%

50.0%

61.8%

100.0%

Nifty Bank has long term support at 21000 level.

Upper range is around 26700 levels

Bank nifty short terrm range between 23000- 26000.

Upward target at 32500 in within next 2 years

NIFTY BANK (23,312.60, 23,904.10, 23,132.45, 23,846.80, +655.451)

Bank Nifty


2011 2013 2014 2015 2016 2017 2018 2019 2020

3000

3500

4000

4500

5000

5500

6000

6500

7000

7500

8000

8500

9000

9500

10000

10500

11000

11500

12000

12500

0.0%

23.6%

38.2%

50.0%61.8%

100.0%

161.8%

Nifty Auto Index hit 4500 levels in march 2020

which is the lowest since2012.

Nifty peaked in Jan 2018 at 11876 & hit lowest at 4511.

Since then, it is trying to touch the march 2020 high

which was 8500.

Hence short term range is 6900 to 8500

with along term target of 10900-11876

NIFTY AUTO

Auto Index


Pharma view support at 10500 and target is 14500

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

40004500

500055006000

6500700075008000

850090009500

10000

10500110001150012000

12500130001350014000

14500NIFTY PHARMA (12,230.15, 12,343.70, 12,017.95, 12,043.95, -165.250)

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

40004500

500055006000

6500700075008000

850090009500

10000

10500110001150012000

12500130001350014000

14500

0.0%

23.6%38.2%50.0%61.8%

100.0%

161.8%

261.8%NIFTY PHARMA (12,230.15, 12,343.70, 12,017.95, 12,043.95, -165.250)


• Markets may look overvalued on the surface. However, various macro factors are currently indicating that

the markets may not be that expensive

• Valuations (P/E) are high due to earnings compression and abundant liquidity. Market cap to GDP ratio is low compared to

previous peaks and is driven by select Mega cap stocks• Credit growth is lagging deposit growth with incremental Credit to Deposit growth now at just 44% from

151% seen in Jan-19. This coupled with low Capacity Utilization Level indicates that Business Cycle is at

the bottom

• Markets have delivered flat to negative returns in last 3 years. The earnings growth too in the last 3 years has been negative.

Hence, there is headroom for equity markets to perform as sentiments around equity is not euphoric• Indian economy is witnessing a gradual recovery post phased re-opening and continued normalization in

activity levels• India is also well placed in terms of fundamentals including Demographic advantage, healthy forex

reserves, improving

current account balance, etc. among other factors• Considering the above factors, equity markets are in the neutral zone making a case for staggered

investments in equity. Asset allocation schemes should be considered for managing near term volatility

Happy Investing!!

36

Market Outlook 2020-2021

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