Stallion Asset CIO sees market bottom near, expects new growth leaders in Samvat 2083

Amit Jeswani, Founder and Chief Investment Officer of Stallion Asset Management, is optimistic about the outlook for Indian equities in Samvat 2083, saying the market could be close to finding a bottom after a difficult period.

He believes that improving corporate earnings, strong GST collections and more reasonable valuations could support a recovery in the coming months.

Jeswani said the Nifty could find strong support around the 22,000 mark, barring a sharp spike in crude oil prices. However, he believes the next leg of the bull market will depend on the emergence of companies capable of delivering earnings growth of 30-40%. Such companies, he believes, could attract foreign institutional investors (FIIs) back to Indian equities.

“I believe we are very close to the bottom,” Jeswani said, pointing to the improving earnings performance of Indian companies. He added that investors should focus on corporate earnings rather than short-term movements in stock prices.

According to him, the market needs a new set of growth leaders to regain investor confidence and attract global capital.

Jeswani believes artificial intelligence (AI) and software-led business models will play a significant role in wealth creation over the coming years. According to him, companies that effectively use technology to improve productivity and reduce costs could emerge as major beneficiaries.

He explained that businesses can create wealth through four forms of leverage: people, capital, code and networks. Of these, he believes code, or software, has become the biggest driver of incremental wealth creation globally.

India may not necessarily be at the forefront of developing AI technology, but its entrepreneurs could benefit by adopting it across industries. Jeswani drew parallels with earlier technology shifts, arguing that the biggest beneficiaries are often businesses that use new technologies rather than those that manufacture them.

He expects India's corporate profit pool to expand significantly, potentially doubling from around ₹33 lakh crore to ₹66 lakh crore. However, he believes this growth will not be evenly distributed, with companies that use technology effectively likely to capture a larger share of the opportunity.

Jeswani sees opportunities in the logistics sector, particularly as competition reduces and leading players gain market share. He said the express logistics market has consolidated from six players to just two, creating room for stronger companies to scale up.

He highlighted a company in his portfolio that reported 58% growth in the latest quarter, adding that Stallion Asset prefers businesses in the growth phase that are rapidly expanding their market presence.

Another opportunity Jeswani is tracking is the potential implementation of the Merchant Discount Rate (MDR) framework in the payments industry.

He estimates that the move could unlock around ₹16,000 crore in additional revenue for three major players, with the opportunity growing at nearly 25% annually. Since this additional revenue may not require a significant increase in costs, it could lead to a sharp rise in profitability.

He believes some companies could see their profits increase as much as five times if the framework is implemented.

For the entire discussion, watch the accompanying video