How did you view all week? Yes, we were facing many challenges. It was a difficult week with so much news flow that came in from worldwide markets. It was hard to digest. But one thing I would say – Indian markets now behave pretty mature and we see a rational approach.
Mayuresh Joshi: Oh yes, it was a roller coaster week of the wildest journeys that you would experience in every water park! The events that took place, especially around Trump’s rates, led to the correction that we are currently witnessed.
However, the market’s reaction has been quite adult, as you have rightly noted. There has been no panic or abrupt sale. A large part of this resilience is due to strong domestic streams. The Indian Retail Investor seems to have discovered the secret sauce – remain invested for the long term. In times like this, if you continue with your systematic investments, they will yield results over time. So yes, while Trump rates were central this week, the markets responded very adults.
So much happens on both worldwide and domestic markets. The rategers will continue and uncertainties continue to exist. In the Interior Front, the first half of the income was not great, but the second half showed promise. FIIs have not returned yet, so a clear direction is missing for the domestic market.
Do you see the coming party season as a spark of hope – especially for consumption, cars, hotels, tourism, etc., with festivals that start with Raksha Bandhan?
Mayuresh Joshi: Oh yes, that’s hope. Both urban and national consumption is expected to make a strong comeback in the second half. Tax cuts are a booster for urban India. For National India, better monsoons and higher prices for farms for money crops lead to better realizations and income.
As a result, it is expected that consumption will pick up considerably. That is a stage of GDP growth. The second is that investments – with the government Capex at a rapid pace and private capex that shows early signs of revival. However, if the income starts with new life and the rate sound will be established for the next 3-6 months, I will not see why FDI and FPI streams will not return. India, in a global context, is still a domestic driven consumption economy. So even if investors are being re -assigned at the moment, I believe they will return to H2. Any non-structural market correction must be seen as a buying option-especially in quality sectors and shares with leadership and income visibility.
Another important economic event this week was the credit policy of the RBI. While the rates were left unchanged, the governor repeated the support for growth.
Given the current inflation views, do you think RBI has room to lower the rates? The following policy must appear in October. Could there be a festive surprise in the form of a rate reduction?
Mayuresh Joshi: That is certainly a possibility. A speed reduction of 25 BPS is still expected, possibly in the next policy or the following.
The prospects depend on how worldwide events unfold. Will the FED move in September? What inflatoar impact will Trump’s policy have – not only in the US, but worldwide? How will he negotiate with India, China and other BRICS countries?
So yes, a 25 horsepower in the October policy prior to the festive season is very on the table. Let’s see how the RBI navigates this.
Given how difficult markets are, investors are not sure about when they should come in. They anticipate Downtrends, but do not know where the soil lies. If someone wants to invest now, what should his strategy be? Imagine giving you an empty canvas – how would you paint it?
Mayuresh Joshi: To be honest, nobody can predict the soil. As our deceased founder often said: “I have never seen a successful pessimist.”
So I remain very optimistic about India in the next 5-10 years. It is still a fundamental domestic driven growth story.
Regardless of Trump’s policy, certain hospital stocks in health care can continue to do well. So pharmaceutical names can select-to make production medicines cost-effective in the US not feasible.
Clothing and consumption names also look attractive, in particular on domestic focused value equipment, which can benefit from the national and urban consumption recovery. FMCG is ready for a strong comeback. Agrochemic shares can also see an improved operational leverage due to strong monsoons and volume growth. Financials will also play a key role – as a private Capex returns, financial data will support the wider ecosystem.
So yes, focus on domestic stories – consumption, financial data, selected cars and agrochemicals. These areas are isolated by global noise such as Trump rates and have solid income visibility. Are not shaken by corrections. Instead, treat them as possibilities to enter shares that you may have missed before.
Is there a certain sector on which you are currently concentrating – and you avoid?
Mayuresh Joshi: Within health care I am positive in the hospital segment. The figures have been stable and are expected to remain strong. These companies have adopted smart expansion strategies – both Brownfield and Greenfield – that keep the balance leverage low. The average turnover per operational bed improves, which increases the profit potential.
On the other hand, I remain careful. The sector is still confronted with different headwinds. What a clear beacon seemed a few decades ago now requires reinvestment. Worldwide-in-case of Chinese companies, there is rising competition through AI-based platforms. AI becomes the fashion word – whether it is generative AI, agent Ai or Agile AI.
Indian IT companies need considerable investments to remain relevant. The labor costs advantage that they once enjoyed is decreasing, because AI-driven models perform better than legacy models. Until the company companies renovate and strategize again, I would remain careful. So for now I avoid the sector.
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