Some hues of populism in Budget 2024 possible; don’t expect negative surprises in Q1 earnings: Founder of Dhanvesttor

Anooshka Soham Bathwal, the CEO and founder of Dhanvesttor, believes the Union Budget 2024 will focus on infrastructure, defence, railways, and capital goods sectors, but considering the coalition government, a bit of populism may not be ruled out. In an interview with Mint, Bathwal says she does not expect negative surprises in the Q1FY25 earnings of India Inc. Moreover, Bathwal also shares her view on how women's participation in the realm of investing could be increased.

Edited excerpts:

How could the market behave in the run-up to the Union Budget? How do you expect it to move after this major event?

The market may stay in sideways movement in the run-up to the Budget.

We expect the government's impetus on infrastructure, defence, housing, agriculture and related sectors to keep the performance of these sectors in focus.

In addition, continued economic growth and progressive initiatives of the government may keep the markets healthy.

However, any adverse announcement on the tax front could be a potential risk.

What is the market expecting from this Budget?

Domestic equities are anticipated to consolidate within a higher range following a sharp run post-election results.

Market movements will also be influenced by Q1FY25 earnings and macroeconomic factors, including upcoming inflation data and the US election along with the Budget.

Recently, Nifty, Sensex, and broader markets have shown impressive performance. 

This Budget is expected to focus on key areas such as infrastructure, defence, railways, and capital goods. 

Additionally, considering the coalition government, a bit of populism may not be ruled out in the Budget. 

We also expect a continued focus on rural demand from this Budget, with a special focus on women. 

Optimism persists around a favourable Union Budget that will drive consumer spending, stable inflation, and the growth of the domestic economy. 

The buying trend among foreign institutional investors (FIIs) will likely continue even after the Budget.

Earnings season is here. Are we in for a negative surprise?

Recent pre-quarter announcements by corporations paint a mixed picture of the upcoming earnings season.

While companies in the FMCG space expect the recovery in rural markets to steady their growth, most of the banks reported a slower growth in business.

The IT sector might witness a better growth led by seasonal strength.

Overall, we expect earnings season to be healthy and negative surprises will be limited, in our view.

Despite concerns over frothy valuations, why are we witnessing a relentless rise in the mid and smallcap spaces? What should investors do?

Firstly, there is a strong domestic liquidity inflow driven by retail investors seeking higher returns.

Secondly, economic recovery and healthy corporate earnings have given an impetus to investor confidence.

Additionally, mid and small-cap companies often present unique growth opportunities and innovation potential that attract investors looking for high-growth prospects.

Investors should approach this trend with cautious optimism.

Conduct thorough research and due diligence before investing, focusing on companies with strong fundamentals, sustainable business models, and prudent management.

Diversifying portfolios to mitigate risks and avoid overexposure to a single segment is also crucial.

Lastly, having a long-term investment horizon can help investors navigate market volatility and capitalise on the growth potential of mid and small-cap stocks.

Amid surging numbers of retail investors, do you observe a rise in the number of women investors? How can we ensure more participation of women in the realm of investing?

To further increase women's participation in investing, we can implement targeted financial education programs, create mentorship opportunities with experienced female investors, and develop inclusive financial products tailored to women's needs.

Facilitating networking events and online communities can provide support and create a sense of community.

Advocating for policies that promote women's economic empowerment and encouraging companies to offer financial wellness programs as part of their employee benefits can help women gain the knowledge and resources needed to invest confidently.

These measures will create a more inclusive and supportive environment, contributing to women's financial independence and economic empowerment.

Why is it the right time to launch women-centric funds?

Firstly, there is a growing recognition of the significant economic impact women can have as entrepreneurs and business leaders.

Investing in women-led enterprises has yielded positive returns and driven inclusive economic growth.

Secondly, the increasing number of women investors signals a market demand for investment products that resonate with their values and financial goals.

Societal shifts towards gender equality and women's empowerment have created a supportive environment for such initiatives.

Women-centric funds can address specific challenges female entrepreneurs and investors face, such as access to investment avenues and financial literacy, which, in our case, foster a more equitable business landscape.

Additionally, these funds can attract investors looking to support diversity and social impact, aligning with broader trends in responsible and sustainable investing.

How can we promote women entrepreneurship?

Promoting women's entrepreneurship requires targeted strategies to ensure their success in India's evolving business landscape.

To attract more domestic capital, we can advocate for additional tax breaks for investors and promoters who specifically support women-led ventures.

As India progresses towards becoming a global hub for entrepreneurship and innovation, creating both technological and process innovations with a gender-inclusive lens is crucial.

Significant improvements in ongoing training and skill upgrades for women are vital, particularly in the rapidly growing tier-2 and tier-3 markets.

Addressing the credit challenges faced by women-owned SMEs and a lack of marketplace is essential; the government can play a pivotal role by offering easier access to credit and implementing policies that aid in scaling up businesses.

While the Startup India initiative has successfully simplified the process of starting a business, further policies are necessary to ensure women-led startups not only thrive but also grow.

Creating mentorship programs, providing access to networks, and ensuring a supportive regulatory environment will help empower women entrepreneurs and drive inclusive economic growth.

SEBI has recently announced several measures related to trading and investing. How do you see them? What more should be done?

The regulator has taken several steps to enhance risk management and transparency in the system.

These steps might help the regulator protect the interests of retail investors, but they will also help ensure proper vigilance of the market participants.

Given the current market performance and the more speculative nature of many transactions on the F&O side, we see these steps as right and progressive for the markets.

In line with this, we expect the regulator to continue broadening the markets with clear and detailed policies for risk management.

Read all market-related news here

Disclaimer: The views and recommendations above are those of individual analysts, experts, and brokerage firms, not Mint. We advise investors to consult certified experts before making any investment decisions.