Nifty may underperform broader market as half its constituents lag GDP growth: Sunil Singhania

Detailed summary

Abakkus Asset Manager's Sunil Singhania expects Nifty to underperform the broader market, with 40-50% of its constituents unlikely to match India's GDP growth amid shifting sectoral opportunities.

India's benchmark Nifty index could underperform the broader market over time, as nearly half of its constituent companies may struggle to grow in line with the country's gross domestic product (GDP), according to Sunil Singhania, Founder of Abakkus Asset Manager.

Speaking to CNBC-TV18, Singhania outlined an impending shift in market leadership as India transitions from a $4 trillion to an $8 trillion economy. He said traditional heavyweights in sectors such as fast-moving consumer goods (FMCG), oil and gas, and information technology (IT) face structural limitations to growth.

"If you actually look at the composition of Nifty, 40-50% of the companies will not even grow in line with the GDP, not because something is wrong with them, but the sector is like that," Singhania said.

He added that IT services companies may find it difficult to grow beyond 2% to 3% operationally, while the…

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