Looking for narrative stocks? These four themes look promising: Anand Radhakrishnan
You Might Also Like:
Expect positive trend as benefits of rate cuts & consumption boost trickle down: Anand Radhakrishnan
You Might Also Like:
FIIs to return in a big way post BTA with US; IT a big pick for next 18 months: Sunil Subramaniam
(You can now subscribe to our
(You can now subscribe to our ETMarkets WhatsApp channel
, MD,, says Indian markets show interesting trends. Sustainability efforts gain traction. Manufacturing , especially defence, sees strength. Premium goods and services experience rising demand. Technology-based disruption companies emerge in logistics, e-commerce and fintech. These new-age companies show volatility. But some establish strong market presence. Sustainability, premiumization , manufacturing, and technology disruption offer opportunities. These four themes look promising for the markets.Yes, currently there are multiple themes in the market. One is on the sustainability theme where not only in India, but globally, there has been a concerted effort to push towards decarbonization, alternate energy, electrification, recycling, etc. In India also, some of the companies which have been engaged in these spaces generally have got some tailwind. Though at the margin we have seen some moderation in the global push towards sustainability because of various policy issues globally, we have seen that in the domestic market there is a reasonable continued tailwind on that.There are other themes also which have been currently focused. One is on the manufacturing side; we have seen defence being a subset of the Atmanirbhar or Make for India theme. We have seen reasonable strength. The companies have been declaring good numbers on the manufacturing side, be it the industrial goods companies as well as defence manufacturing companies. Some of the companies that supply ancillaries and equipment to railways, have been declaring good numbers and have healthy order books. That theme continues to remain fairly strong.The third theme which we feel is gaining a little bit momentum is the so-called premiumization trend. As the income levels go up, the demand for goods and services especially on the premium end of the market has been going up – be it in automobiles, financial services, wealth management, apparel, retailing system, in short multiple sectors. The companies that are engaged in the manufacturing and the delivery of premium goods and premium services have been trending at a faster growth rate and that is why the companies are less volatile, their earnings more resilient and provide very good multi-year growth opportunities.Finally, the fourth trend which we see in the market is the technology-based disruption companies, like Eternal, Swiggy, Policybazaar, etc. We also expect more companies in logistics, delivery systems, e-commerce, fintech, food tech and healthcare technology. Though some of these new-age companies tend to be more volatile, there is a lot of uncertainty around their profitability, the business models are nascent and evolving but some of them are pretty strong and have established a moat and footprint in the marketplace. So, we would remain very constructive. A combination of all these four themes, sustainability, premiumization, manufacturing, and technology-based disruption look pretty interesting as the markets stand today.Clearly the earnings growth is little healthier as we go down the cap curve and largecap companies declared earnings growth are less than the mid and small-sized earnings growth. So, to that extent, one can justify a growth-led premium as we go down the cap curve. But growth is not the only reason why stock should value, there are stabilities, qualities, capital efficiency, transparency, there are many issues where we still have to justify why we should pay a significant premium to small companies.As we go down, while the growth gets more interesting, the valuations make it a very tight rope walk for us and therefore, we need to trade off between good growth companies which are valued very richly and moderate growth companies that are valued a lot more moderately in the marketplace. Yes, we are sacrificing growth for some margin of safety, but from a portfolio perspective, that is a very tricky trade off fund managers have to make while they are investing down the cap curve.Within the largecap, we do see pockets of dull growth. For example, IT companies have been growing at low single digits and the visibility seems to be still very challenging for them. Some of the commodity companies continue to be volatile in earnings and there is no clear trend on global commodity prices which makes it tough for one to allocate big money. Similarly, the utility companies are little bit low growth. So, within the basket of largecaps, the proportion of moderately growing companies is very high whereas in the mid and small-sized stocks, we see the breadth being pretty healthy, etc.One more point on valuation is growth-led valuation, and the other is liquidity-led valuation. As we speak today, the mid and smalls-sized companies seem to be predominantly supported by the domestic investors, not so much by the foreign institutional investors per se. We need to be a little careful and watchful of the domestic liquidity conditions.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Indian Express
22 minutes ago
- Indian Express
Daily Briefing: Unpacking Trump's 25% blow
Good morning, The final match of the England vs India Test series begins today. It's a moment of reckoning for the young team, who can either draw the series 2-2 or settle for a 3-1 defeat. But before the game gets underway, the Indian team management has raised a red flag: At Lord's, where England handed India its second defeat, the latter got a ball 30-35 overs old when they asked for a replacement of the out-of-shape 10-over-old ball. Now, protocols dictate that the replacement must be as old as the original, but umpires told them they had no balls 10 overs old in the stock. Indians feel that was the turning point of the match. Before the replacement, the harder ball swung, giving them the required seam movement, but the older and softer ball disadvantaged them. The team contends that the rules over ball changes need a rethink. National sports editor Sandeep Dwivedi has more details. On that note, let's get to the rest of today's edition. US President Donald Trump has announced a 25 per cent tariff on Indian goods starting August 1, with an additional 'penalty' for its defence and energy imports from Russia. The announcement came just two days before the August 1 deadline, when Trump's reciprocal tariffs were scheduled to take effect. Crucially, India and the US have yet to finalise a trade deal. Game of chicken: From India's perspective, they could have finalised a trade deal with the US by October. Trump's announcement, however, has put the burden back on India to fast-track its negotiations. It's also being seen as a way to pressure India into accepting US demands, which it has resisted so far. Notably, India has drawn red lines around critical sectors such as agriculture, averting 'the trap of a one-sided deal'. China challenge: With China in the advanced stages of negotiations with the US, it would likely have a first-mover advantage. It may carve out a deal with favourable tariff rates and concessions on secondary tariffs. A higher tariff on China would have given India a competitive edge in the market. The best-case scenario? Though Trump has not specified the penalties for Russian oil, his earlier statements indicate that it could be 100 per cent, which would be a significant setback for India. Without the additional penalties, a 25 per cent tariff puts India in a position similar to Vietnam's (20-40%), Indonesia's (19%), and China's (so far 30-34%). Ultimately, India is looking to finalise a deal with a 15 per cent tariff on its goods. It may serve New Delhi well to negotiate an interim deal as of now and carve out a final agreement over time. Also read: India may have to fend off US tariffs on another front: smartphones. Here's why it matters. Since Jagdeep Dhankhar's abrupt resignation as Vice President earlier this month, several reports have indicated that tensions between the VP and the ruling party had been brewing for months. From being robbed of an opportunity to meet US Vice President JD Vance to the final nail in the coffin over an impeachment motion in Parliament, Dhankhar was in a silent tussle with the BJP high command. Now, a new story has come to light. My colleague Mahender Singh Manral reports that the VP's Secretariat had sought new bulletproof vehicles for Dhankhar to replace the three ageing BMW cars. In June last year, the Ministry of Home Affairs said it would form a panel to look into the request made in February. But by November, the VP's office decided to opt for a non-bulletproof Innova. Read on. 'They are innocent': Last week, two Kerala nuns were arrested in Chhattisgarh over allegations of forcible conversion and trafficking, triggering a political storm. One of the women they are accused of targeting has told The Indian Express that she was coerced by a woman associated with a right-wing outfit to give a statement against the nuns. Ring of Fire: The 8.8 magnitude earthquake in Russia's far eastern corner of the Kamchatka Peninsula triggered a tsunami that struck countries on both sides of the Pacific Ocean. The earthquake is among the strongest ones on record. Only five other earthquakes of magnitude 8.5 and above have struck the region in the past two decades. Though the event was rare, it is not unusual. The area is earthquake-prone as it lies on the Circum-Pacific seismic belt, more popularly known as the 'Ring of Fire'. This seismically active belt, which encircles the entire Pacific Ocean, witnesses the maximum number of earthquakes and volcanic eruptions on Earth. Read all about it. Safety check: Aviation safety regulator Directorate General of Civil Aviation (DGCA) found 263 safety-related lapses across operators in annual audits. Government-owned Alliance Air topped the list with 57 lapses, followed by Air India with 51 findings. However, the DGCA has assured that the higher number of lapses is 'entirely normal' for large carriers. It added that such findings and consequent corrective actions are 'testament to active regulatory oversight'. Data shows that movie ticket prices have shot up in the last decade, rising by 12.6 per cent in just the last two years. As moviegoing starts feeling like a luxury, those who bought into the 'first day, first show' hype are now forced to wait for 'last show' discounts or stake out buy-one-get-one offers. I leave you with my colleague Rahul Pratyush's plea for affordable cinema. 🎧 Before you go, do tune in to today's '3 Things' podcast episode, where we discuss the India-UK free trade agreement and the stampede in Haridwar. That's all for today, folks! Until tomorrow, Sonal Gupta Sonal Gupta is a senior sub-editor on the news desk. She writes feature stories and explainers on a wide range of topics from art and culture to international affairs. She also curates the Morning Expresso, a daily briefing of top stories of the day, which won gold in the 'best newsletter' category at the WAN-IFRA South Asian Digital Media Awards 2023. She also edits our newly-launched pop culture section, Fresh Take. ... Read More
&w=3840&q=100)
Business Standard
24 minutes ago
- Business Standard
Trump tariff on Indian goods to raise drugs costs in US: Pharmexcil
Pharmaceuticals Export Promotion Council of India (Pharmexcil) on Thursday said President Donald Trump's imposition of a 25 per cent tariff plus unspecified penalty on all goods coming from India starting August 1, will result in increased costs for essential drugs in the US, ultimately harming consumers and healthcare systems in the country in the long term. The US market, heavily reliant on India for Active Pharmaceutical Ingredients (APIs) and low-cost generics, faces a daunting challenge in finding alternative sources that can match the scale, quality, and affordability that India offers, Pharmexcil Chairman Namit Joshi said in a statement. President Donald Trump on Wednesday announced the imposition of a 25 per cent tariff on all goods coming from India starting August 1, plus an unspecified penalty for buying Russian crude oil and military equipment. Reacting to the development, Joshi said India has long been a cornerstone of the global supply chain for affordable, high-quality medicines, particularly in the generic drug market, where it supplies nearly 47 per cent of the pharmaceutical needs of the US. "Indian pharmaceutical companies play a vital role in ensuring the affordability and availability of essential medications, including life-saving oncology drugs, antibiotics, and chronic disease treatments," he asserted. Joshi further said, "Any disruption to this supply chain will inevitably lead to shortages and escalating prices, ultimately harming US consumers and healthcare systems." While the immediate consequences of these tariffs will likely result in increased costs for essential drugs, he said, "The long-term impact will be even more severe. The US market, heavily reliant on India for Active Pharmaceutical Ingredients (APIs) and low-cost generics, faces a daunting challenge in finding alternative sources that can match the scale, quality, and affordability that India offers." Moreover, he said, "Efforts to transition pharmaceutical manufacturing and API production to other countries or domestic sources in the US are projected to take several years, at a minimum of 3-5 years, before meaningful capacity can be established." Joshi said Pharmexcil remained committed to advocating for the interests of Indian pharmaceutical exporters and the global healthcare community. "We continue to engage with policymakers to emphasise the importance of affordable access to medicines and the indispensable role Indian pharmaceutical companies play in meeting the growing global demand for essential drugs," he noted.
Mint
24 minutes ago
- Mint
Textile, pharma to jewellery — Top sectors that may feel the pinch first from Trump's 25% tariff on India
Trump tariffs on India: US President Donald Trump on Wednesday declared a 25 per cent tariff on Indian goods, effective August 1, citing India's "obnoxious" trade barriers and close ties with Russia for defence and energy. The move, though not entirely unexpected, has triggered unease among Indian policymakers, exporters, and market participants, given the ambiguity around additional penalties Trump promised for India's Russian transactions. In a press statement, Trump referred to India as a 'friend' but argued that it imposes some of the highest tariffs on US goods and continues to enforce non-tariff barriers that are "unreasonable." He added that India's energy and defence cooperation with Russia, especially amidst the ongoing Ukraine war, 'empowers Moscow' and must be penalised. However, the details of the penalty for these transactions were not disclosed. In its first response to the announcement, the Indian government stated that it had 'taken note' of the new duty and is 'studying its implications.' It reiterated its commitment to a 'fair, balanced, and mutually beneficial' trade agreement with the US, signalling hope that diplomacy may temper the impact. Industry experts believe the immediate impact will be most visible in export-heavy sectors. Colin Shah, MD at Kama Jewellery, said the decision comes as a 'big blow' to India's gem and jewellery industry, one of the country's largest export contributors. 'The US is a critical export market. A 25 per cent tariff is bound to reduce the competitiveness of Indian goods, especially gems and jewellery, which are already under pressure due to prolonged geopolitical tensions involving Russia, Ukraine, and the Middle East,' Shah noted. He further added that Trump's return to political prominence and his unpredictable stance on trade have reignited uncertainty in Indian markets. 'We expect trade with the US to remain muted in the near term. However, all eyes are now on the sixth round of India-US Bilateral Trade Agreement talks, scheduled for late August, which may provide clarity,' Shah said. Meanwhile, Nuvama has also cautioned that India's export-driven sectors may face turbulence. In its latest commentary, the brokerage estimated that India's goods exports to the US — valued at approximately $87 billion — could be significantly impacted. These exports account for nearly 20 per cent of India's total goods exports and around 2.5 per cent of GDP, underlining the weight of the US as a key trading partner. While the direct blow to India's GDP may be limited due to the modest overall share of US exports in the country's economic output, the implications across sectors such as textiles, pharmaceuticals, electronics, agri-products, and machinery are likely to be substantial, Nuvama said. Nitin Bhatt, Technology Sector Leader, EY India, said, 'While the Indian IT services sector isn't directly hit by the newly announced 25% US tariffs, the ripple effects could be substantial. Rising input costs may prompt US companies to scale back discretionary tech spending. Simultaneously, growing unease around workforce mobility and evolving digital taxation frameworks could redefine how cross-border services are priced and delivered.' Nuvama further noted that these developments may heighten investor caution. The elevated tariffs could lead to increased risk aversion among foreign institutional investors, especially at a time when India's domestic consumption remains subdued. Sectors such as pharma, auto ancillaries, industrials, and tiles — which are heavily reliant on US demand — could witness notable volatility. Small- and mid-cap segments, along with high-beta sectors like real estate and NBFCs, might see more intense pressure due to the risk of capital outflows. On the contrary, a depreciating rupee may benefit IT services firms, which tend to perform well in weak currency environments. Given that IT valuations are currently subdued, Nuvama expects this space to potentially outperform in the near term. Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
