ETMarkets Smart Talk: Global semiconductor sector likely to reach a trillion-dollar industry by 2030: Anil Rego

“The global semiconductor sector is positioned for a decade of expansion and is forecasted to reach a trillion-dollar industry by the year 2030 driven by automotive, data storage, and wireless industries,” says Anil Rego, Founder and Fund Manager at Right Horizons – A SEBI-registered PMS provider.

In an interview with ETMarkets, Rego said: “We are bullish on the Banking, Auto & Ancillaries and Building Materials segment as we expect these segments to continue driving incremental earnings and further quality names within the space are likely to outperform peers,” Edited excerpts:

It has been a volatile month so far – what is fueling volatility in the markets?

Anil Rego: The mid and small-cap segments have exhibited higher volatility compared to large-caps, fueled by concerns of overvaluation in the broader market.


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AMFI issued advisories urging members to moderate investments in small and mid-cap funds amid fears of a potential market downturn due to significant inflows.

Responding to SEBI’s directives, AMFI mandated mutual funds to conduct stress tests to assess their resilience.

These measures aim to mitigate risks associated with excessive inflows and market instability, emphasizing the need for caution and strategic planning within the mutual fund industry to navigate potential challenges and safeguard investor interests.

The voices are growing louder about the valuations around small & midcaps – what are your views?

Anil Rego: The small-cap and microcap sectors are witnessing volatility as investors exercise caution amidst concerns of overvaluation. We anticipate this volatility to persist in the short term.

Our recommendation is to restrict exposure to high-quality stocks within this segment, which are available at reasonable prices and demonstrate consistent healthy earnings growth.

This approach aims to navigate the current market uncertainties while capitalizing on opportunities presented by fundamentally sound investments.

How should investors value small & midcaps for investment in FY25? How to determine which stock is overpriced after the recent rally?

Anil Rego: The SMID segment offers high returns but comes with increased volatility. We expect selective names with a strong order book, superior earnings growth & healthy return metrics and a sustainable business model are likely to be good opportunities.

We prefer companies that are available at a reasonable discount to value with clear signs of profitability and are gaining market share from the competition.

If the growth momentum in earnings is sustainable for the longer term then investors may continue to hold the investments despite the rally.

What is your view on Gold which is also hovering around record highs? Which is a better investment in 2024 – Gold or Silver?

Anil Rego: Throughout history, gold and silver have served as safe-haven assets, offering protection against unforeseen events like market downturns and crises.

Recently, gold surged to record highs amid one of the most significant rallies in years. Anticipating Federal Reserve interest rate cuts and declining U.S. real yields, we foresee continued support for gold prices.

These factors underscore the enduring appeal of precious metals in times of economic uncertainty, as investors seek refuge in assets known for their stability and resilience against turbulent market conditions.

As we close the FY24 – how do you see FY25 for Indian markets. Any trigger points that investors should take note off?

Anil Rego: India is benefiting from tailwinds with healthy GDP growth, moderating inflation, range-bound oil prices, expected rate cuts, and resilient corporate earnings.

Mid and Smallcaps have rallied since March’23 considering the structural shifts in the domestic economy that are steering toward the multi-decadal growth outlook of the economy.

However, we see limited opportunities in this space in the near term and expect the large caps to contribute going forward against the backdrop assuming a stable global macro, domestic political continuation, and gradual rate cuts by the RBI.

Risks are currently exogenous such as global slowdown and geopolitical uncertainty.

Your list of sectors that investors should not ignore in FY25?

Anil Rego: We are bullish on the Banking, Auto & Ancillaries and Building Materials segment as we expect these segments to continue driving incremental earnings and further quality names within the space are likely to outperform peers.

Building Material –



We are optimistic about the building materials demand outlook due to increased investment towards infrastructure, urbanisation, and a recovery in the housing and commercial real estate markets.

In the FY24 budget, the government has proposed to increase the funds for PM Awas Yojna by 66%, making it Rs. 79,000 crores boosting the pace in affordable segment housing in India.

Additionally, the government has proposed investing heavily in transport infrastructure projects benefitting the real-estate markets across India, especially in Tier-2 and Tier-3 cities.

Auto –

The sector is in a cyclical uptrend supported by a sharp recovery in urban demand and a shift in preference towards EVs.

Banking –

The Banking space is witnessing robust credit growth momentum driven by the continued traction in the Retail and SME segments. On a segmental basis, home loans, Auto loans and Credit card outstanding continue to grow, and corporate loans are recovering gradually.

However, deposit growth continues to lag credit growth, so focus on mobilising deposits is a key monitorable.

What are your views on the semiconductor trend for the next FY? Will the next set of multi-baggers come from a manufacturing/IT theme?

Anil Rego: The global semiconductor sector is positioned for a decade of expansion and is forecasted to reach a trillion-dollar industry by the year 2030 driven by automotive, data storage, and wireless industries.

While the IT sector is under pressure in the near term, over the longer-term, IT sector should also do well due to structural favourable factors. We believe both industries over the long term to grow healthily.

SIPs have hit nearly Rs 19,000 cr mark/month. The trend is picking up fast – what does it say about the retail investor behaviour and how do you see the trend picking up in FY25?

Anil Rego: According to data from the Association of Mutual Funds in India, monthly contributions to systematic investment plans (SIPs) have reached a new peak of ?19,186 crore, exceeding January’s peak of ?18,838 crore.

The increase in the number of investors observed during the post-pandemic period, despite volatility caused by global geopolitical factors and inflation, also indicates resilient investor behaviour.

India’s strong fundamentals relative to other economies are due to the buoyant credit cycle and de-levered balance sheets of corporates and a healthier banking system.

With earnings growth prospects and relatively better fundamentals, we expect the momentum to continue.



(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)

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