Time for caution on business-to-govt stocks now after 18-month rally: Amit Jeswani

The rally in the business-to-government stocks, which is going on for the last 18 months, has reached the fag end now, said investment expert Amit Jeswani, advising investors to jump off the train.

“There will be speed breakers in this space now which cannot be broken and you will have to jump out,” said Jeswani, Founder and CIO at Stallion Asset, in an X Space conversation with Moneycontrol.

Instead, Jeswani advised investors who missed the B2G trend to look for new trends that will possibly emerge in 2024. “Markets will find newer spaces. The previous sectoral trend being pharma and IT in the post covid era, started in 2020 and ended in October 2021. This shows that sectoral trends typically last for 18 to 20 months,” he said.

The B2G rally has been going on for the last 18 months, beginning with the defence sector back in March 2022, he said. During the wartime, market leaders such as Hindustan Aeronautics soared. Over the last one year, defence stocks such as Mazagon Dock Shipbuilders have reported a 552 percent gain in share price.

The rally then switched over to railways and related stocks such as Titagarh Wagons and Ramkrishna Forgings.

At present, Jeswani sees the road construction space bouncing back. Over the past one year, the Nifty Infra index has delivered a 21.14 percent return. However, even as these stocks have delivered impressive returns over the past 3-4 months, Jeswani believes that the rally is in the late stage given sectoral trends.

He also stated that he prefers staying away from the B2G space due to its unpredictability. He believes that companies serving as market leaders in these spaces keep changing every cycle.

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