Mayuresh Joshi now emphasized in an interview with ET that the twin engines of growth – consumption and capital spending – are expected to stimulate market performance in the coming quarters. He explained that recent GST rationalization measures should lead to higher volumes among sustainable consumers and discretionary goods. At the same time, both the government and the private Capex show signs of revival, to support domestic production and infrastructure projects.
Joshi emphasized various sectors that were ready for growth. According to him, the hotel industry is expected to continue to perform well. Select FMCG companies, in particular those who show a strong volume and value growth, will probably see a considerable profit recovery in Q3. Manufacturers of footwear and domestic clothing are also expected to benefit from improved consumption patterns.
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In infrastructure and production, Joshi pointed to cement and other subsegments that will probably see a reasonable volume growth. Consolidation in the industry, combined with internal efficiency such as use of captive power and optimized logistics, is expected to improve price dynamics. Lower input costs are also expected to support stronger EBITDA performance per tonne as the market goes to Q3.
Joshi further explained that selective NBFCs can continue to do well, supported by the broader investment cycle and the demand for infrastructure. He remains convinced that as the consumption and investment collect, the overall profit growth could maintain and offer a strong basis for market performance.
Despite the softness that is often seen in Q2 as a result of seasonal factors such as monsoons, Joshi believes that Q3 will probably show improved figures. This, he said, could offer the impulse that the market needs to maintain an upward trend and possibly reach all time by the end of the calendar year.
On the sustainable of the consumer, Joshi pointed out that companies are optimistic about the impact of GST cuts. White products such as air conditioners, refrigerators and washing machines are expected to see growth, especially in urban and semi-urban areas. Combined with income tax and GST rationalization, this will probably encourage consumer expenditure. Brands such as Blue Star and Havells are expected to benefit, which is a reflection of growth in both sustainability and the total market momentum.
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