Capital Market Opportunities Abound Despite Short-Term Volatility: Emkay’s Sonthalia
Manish Sonthalia, CIO at Emkay Investment Managers, highlights strong investment opportunities in real estate, select private-sector housing finance NBFCs, and public-sector banks, despite short-term market blips.
Capital MarketReal EstateHousing FinancePublic Sector BanksConsumption GrowthReal Estate NewsJul 07, 2025
Given the strong capital market rebound observed since March, Sonthalia anticipates a positive impact on earnings for the first quarter. He believes that all capital market entities will report better-than-estimated numbers, similar to the fourth quarter when the markets were down. This rebound makes capital market plays a very attractive investment option.
Sonthalia expects a shift from investment-led themes to consumption-driven ones, largely driven by the government’s efforts to boost disposable incomes, particularly for the middle class. Over the past two years, this segment had been strained by inflation and high taxes. However, with income tax savings of ₹1 lakh crore this financial year, a consumption multiplier effect is anticipated, especially in discretionary spending.
Rural consumption is also gaining traction, supported by a recovery in the rural economy and favorable monsoons. This will benefit sectors like travel, hotels, quick-service restaurants (QSRs), personal vehicles, and health insurance—key areas within the consumer discretionary space.
Alongside this, consumption-based growth is likely to strengthen, creating investment opportunities across real estate, select private sector housing finance NBFCs, and public sector banks. Many of these entities are currently trading at attractive valuations, making them compelling buys.
Overall, Sonthalia’s insights highlight the robust potential in the capital markets, driven by a combination of economic recovery, government initiatives, and favorable market conditions.
Frequently Asked Questions
What is the current outlook for capital market plays according to Manish Sonthalia?
Manish Sonthalia, CIO at Emkay Investment Managers, believes that capital market plays offer strong upside potential despite short-term volatility, driven by a strong market rebound and better-than-expected earnings.
What sectors does Sonthalia see as investment opportunities?
Sonthalia sees investment opportunities in real estate, select private-sector housing finance NBFCs, and public sector banks, many of which are trading at attractive valuations.
How is the government boosting disposable incomes?
The government is boosting disposable incomes, particularly for the middle class, through income tax savings of ₹1 lakh crore this financial year, which is expected to have a positive consumption multiplier effect.
What is the impact of favorable monsoons on rural consumption?
Favorable monsoons are aiding the recovery in the rural economy, which is expected to boost rural consumption, benefiting sectors like travel, hotels, QSRs, personal vehicles, and health insurance.
What is the expected shift in investment themes?
Sonthalia expects a shift from investment-led themes to consumption-driven ones, driven by the government’s efforts to boost disposable incomes and the anticipated consumption multiplier effect.
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