As the financial markets navigate through a phase of consolidation, Hiren Ved, Director and Chief Investment Officer at Alchemy Capital Management, shared his insights on CNBC-TV18, painting a picture of cautious optimism and strategic opportunities in various sectors.

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Ved, who manages funds worth over $700 million, emphasised the current market consolidation as a precursor to reaching new highs. This outlook is supported by a strong earnings season, with the broader markets showing a near 40% growth in profit after tax (PAT). He anticipates this positive trend to extend into the third quarter, contributing to the overall market growth.

“You may see a little bit more consolidation but I think we are certainly building a base for new highs maybe at the end of the year or early next year,” he said.

Ved emphasised the resilience of the markets, noting that despite facing rapid interest rate hikes and the impact of two wars, the markets have maintained their position, showcasing their fundamental robustness.

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He highlighted the potential in various sectors like automobiles, non-banking finance companies (NBFCs), agro-chemicals, etc., predicting they will continue to perform well over the next year

According to Ved, for those investing in small-cap and mid-cap stocks, a three-year perspective is essential. However, for those looking at a one-year horizon, large-cap stocks present the most value.

However, he is cautious about the banking sector as "banks will continue to see a contraction in net interest margin (NIMs)." That could be one reason why big banks aren't moving despite good numbers. He prefers NBFCs in the financials space.

Among other sectors, Ved pointed out that the agrochemical sector can offer some good opportunities for long-term investors,

For more, watch the accompanying video

(Edited by : Shweta Mungre)