What makes you assured on the long-term India story?
India has many well-known and nicely mentioned long run structural benefits as in comparison with another rising markets. It is considerably clouded within the brief time period however we are going to get previous this Covid tragedy. If you possibly can look by way of that, then the image turns into extra constructive and notably with additionally the geopolitical scenario, India stacks up fairly nicely as a vacation spot for each manufacturing, provide chain shifting in the direction of India in addition to the home story.
Tactically, would you be tilted extra in the direction of the agricultural performs?
The barbell method is sensible in the meanwhile. There are some ways to play the agricultural facet. Clearly, one of many different traits occurring globally is the rising mushy commodity costs. So rural India would profit from that development as nicely. So I’d completely agree that having publicity to rural India is sensible.
On auto stocks
The auto sector stays one of many areas which presents a really compelling story. The demand seems excellent for the sector, each in four-wheelers and two-wheeler. Obviously, the auto ancillary sector additionally seems fairly good. EVs require loads much less part elements than the present autos, so there might be risks for some corporations going ahead, maybe not within the subsequent 1-2 years. There are large technological shifts occurring globally and the auto ancillary house is one space the place India is genuinely aggressive on a world provide chain foundation.
What form of bank stocks to wager on: corporate-faced banks or retail-focussed ones?
Frankly, I believe no one is secure. The company sector might be going below some stress. Retail-focussed banks commerce at a really excessive premium valuation, however there may be much less room for any hiccups in that pocket. At the second, the company house presents a barely better risk-reward ratio however all sectors are definitely prone to some affect from the present wave.
Do you suppose the metals rally has extra legs in India?
It is an interesting house. We have seen some consolidation in the previous couple of years. So you may argue that domestically there may be some pricing energy. Globally, costs of each mushy and onerous commodities have gone up. I believe the elements which can propel the sector increased are nonetheless in place for a short while longer.
How does the consumption theme look to you?
Consumption clearly has considerations within the brief time period. It goes to be a troublesome sector within the brief time period however India’s consumption story is one which most international traders like. Yes, there are brief time period hiccups occurring in the meanwhile however the consumption story seems fairly engaging. There are some incredible shares inside that space which can be priced accordingly however offer excellent development prospects.