Indian exporters are benefitting from the alternate supply chains trends witnessed across the western region to de-risk from China, particularly in the post-Covid and high-tension geo-political environment, Brokerage firm Emkay Investment Managers said.
In response to ANI questionnaire, Emkay Investment Managers Fund Manager Sachin Shah said, “Indian economy is buzzing, most of the consumer discretionary sectors and industrials like real estate, building materials, autos, engineering, chemicals, etc., are witnessing high demand,” and added that from this perspective, Indian economy relatively to the other countries would be better-off during the global slowdown.
Shah said India is primarily a domestic demand-driven economy, with domestic private consumption and investments contributing 70 per cent to the country’s economic activity. He also said that in quite a few manufacturing industries like auto & auto-ancillaries, engineering, chemicals, pharmaceuticals, electronics manufacturing, textiles, Indian companies were gaining market share globally.
As a piece of advice to investors on wait-and-watch mode, Shah, “Time and time again its proven that investing in equities of quality businesses run by quality managements and portfolio approach in disciplined fashion (no leverage, no short-term trading or speculation, avoiding concertation risk) has stood the test of times by delivering inflation-beating returns.”
On foreign portfolio investment (FPI)/foreign investor institution (FII) coming back to India, Shah said since July 2022, FIIs were net buyers in three months of the last four months up to October 22.
He said FIIs had been net buyers to the tune of over Rs 42,000 crore over the last four months. Shah added that therefore, Emkay Investment believes as long as Indian economy and corporates continue to deliver quality growth, there should be no dearth of foreign flows into the country.
On the resilience shown by rupee, Shah said the strength of rupee against most of the currencies reflects the strength of the India’s macro indicators like inflation, fiscal deficit, current account deficit, import cover, etc., relative to the other countries.
“It seems the differential of high inflation rate of India v/s the developed economies is narrowing as structurally the developed economies seems to have entered the high inflation era,” he said, adding: “If that trend continues, it should help India rupee hold its ground against most of the developed market currencies.”
On asking which sectors will perform better in the short-to-medium term, Shah said, “We believe manufacturing and banking sector should do well. Within the manufacturing sector auto- and auto-ancillaries, chemicals, pharmaceuticals, engineering, electronics manufacturing, defence are witnessing strong demand and orders books are also quite strong.”
Within the banking sector, he said as interest rates and demand for credit rise, the banks that have strong retail deposit franchisee (high CASA) should benefit significantly. (ANI)
Sachin Shah
Fund Manager, Emkay Investment Managers Ltd.
Sachin is a seasoned fund manager with over two decades of experience in the Indian equity markets. By virtue of his extensive research, Sachin realised early-on the need for a framework in which companies with evasively tricky standing needed to be filtered out very objectively, leading to the development of E-Qual Risk, EIML’s proprietary module which helps us to evaluate and compare listed companies on various aspects of governance. Sachin shares his knowledge and insights through various media interactions across print and digital platforms.
