Disclosure: I’m invested in defense stocks.
You post is not well-researched and very emotional. It’s important to be factual and rather than be political and biased. I list down fallacies below.
1) capex as a % of GDP is 0.5 in 2000s?? Please do some basic research. It was never this low and can never be. In fact, we had the highest investment(Public+Private) as a % of GDP in 2000’s infra boom. Now, its primarily the government and private capex is still anemic as a % of GDP. To say that the govt didn’t spend in 2000 is factually wrong. It was spent, but misallocation, corruption led to NPA crisis of last decade.
2) cyclicality of a business and stock market rotation are not the same. FMCG as a sector never had a degrowth in decades. I would say similar with IT (barring 2008,09), pharma.Quality and certainity of earnings is important and hence why certain stocks and sectors will always command higher multiples. A rational investor, would never pay similar multiples for certainity vs cyclicality in earnings, revenue
3) The best performing stocks in 20003-2007 were infact infra,power,steel, real estate.Please do your homework
4) Current govt’s major capex push only started after covid. 2023-2024 was an exception as we had a 30% growth in infra and defense allocation. It will more likely taper to a sustainable low double digit as its estimated in 20224-25 as fiscal deficit as a % GDP is on a gliding path to a normalized level. It’s important to factor this into growth and earnings in infra stocks. In case of defense, import substitution also helped domestic firms
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