Home Improvement, Capital Goods Sectors Among Top Investment Themes For 2022: Nilesh Shah

The Indian equity markets are set to give better returns than any other asset class in 2022 after a spectacular 2021, Nilesh Shah, managing director at Kotak Mahindra Asset Management told Outlook in an exclusive interview. Among the investment themes for 2022, Shah says that real estate sector is likely to do well in the current year and investors should play this theme via investing in ancillary industries like cement, tiles, plywood, wires and cables, consumer durables, housing finance companies rather than pure real estate developers.

"Real estate sector is in a multi-year up move cycle and it is not just one year cycle. Under work from home scenario we need one extra room, there will be more demand owing to nuclearization of families amid low interest rates. For certain segment of society affordability has improved and house prices have remained constant put all this together we will see higher demand for real estate," Shah said.

“In real estate sector there are very few companies with good governance we try to play real estate sector through ancillary industries like cement, tiles, plywood, wires and cables, consumer durables, housing finance companies rather than pure real estate developers,” Shah said.
Shah also advises investing in themes where big is becoming bigger and strong is becoming stronger.

“We saw consolidation happening across industries. For example there were 10 telecom players now there are three and a half players this shows that big will become bigger. We are trying to pick up leaders across various sectors who are on higher growth path than industry,” Shah added.
Shah says that industrials and capital goods sectors are also likely to do well in 2022.
“In last 4-5 years investment has been on a back foot private investment has led public investment now thanks to sugar, steel and cement sector investment has picked up with this there will be bigger orders for industrial and capital goods companies,” Shah added.