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Time of India
28-05-2025
- Business
- Time of India
ETMarkets Smart Talk: India's structural growth story backed by the 3Ds—democracy, demand, and demography
In this edition of ETMarkets Smart Talk, Amit Jain , Co-Founder of Ashika Global Family Office Services, shares a nuanced outlook on Indian equities amidst global volatility and sectoral churn. Drawing on Ashika's long-term investment philosophy , Jain outlines why India's structural growth remains intact—powered by the three key pillars: democracy, demand , and demography. He delves into how these foundational strengths are creating a multi-decade opportunity for investors and why disciplined, governance-first investing is critical in navigating today's market. From sector preferences to managing corporate governance risks, Jain offers timely advice for high-net-worth individuals looking to build resilient portfolios in a dynamic macro environment. Edited Excerpts – Q) Thanks for taking the time out. The month of May started on a volatile note with benchmark indices witnessing wild swings on either side. How are you reading into markets? A) The volatility in May is largely a function of mixed global signals and sectoral rotations playing out in real time. We're seeing a tug of war between sticky inflation data in the U.S., speculation around the Fed's next move, and ongoing geopolitical tensions that are keeping global risk appetite in check. Despite the Geopolitical unrest, Indian markets are demonstrating resilience, supported by strong corporate earnings, robust domestic consumption, and healthy credit growth. At Ashika Global Family Office Services, we believe this volatility is a healthy reset—allowing markets to consolidate before the next leg up. We are advising clients to stay invested, remain stock- and sector-specific, and use corrections to accumulate high-conviction ideas. This is not a time for broad-based aggression, but a moment for focused, disciplined investing. Q) What is the sense you are making from the March quarter results? Are downgrades more than upgrades this time around? A) The March quarter results have been a mixed bag, but overall, they reaffirm the resilience of the Indian corporate sector. While topline growth has moderated for some sectors due to base effects and softening global demand, margin expansion has been a key positive—especially in segments like manufacturing, auto, and select industries where input costs have come down meaningfully. In terms of revisions, it's been fairly balanced. While there have been downgrades in a few export-facing sectors like IT and chemicals due to global headwinds, we've also seen upgrades in domestic-oriented sectors such as banking, capital goods, and consumer discretionary. At Ashika Global Family Office Services, we believe the market is rewarding companies that have demonstrated cost efficiency, pricing power, and strong balance sheets. The key takeaway this earnings season is that the leadership is becoming narrower, and investors need to be selective and forward-looking in their approach. Q) We have seen IndusInd bank results, and more skeletons could come out of the closet in near future. What should investors do who are invested in these types of companies with corporate governance issues? A) Corporate governance is non-negotiable especially in the current market environment where capital is discerning and trust is paramount. Incidents like what we've seen with IndusInd Bank serve as a reminder that strong financials alone are not enough; the quality of management and governance practices are equally critical. We always advocate a 'governance-first' approach to investing. If there are red flags, whether it's lack of transparency, aggressive accounting, or board-level issues, we prefer to step aside, even if the stock appears attractive on valuations. For investors currently holding such names, it's important to reassess the risk-reward framework. If trust is eroded, capital preservation should take precedence over potential upside. In such cases, a phased exit into cleaner, fundamentally stronger alternatives is often the most prudent path forward. Q) What is the long-term outlook for Indian equities over the next few years? A) At Ashika Global Family Office, our investment philosophy is anchored in India's structural strengths, which we call the 3Ds: democracy, demand, and demography. These are not just buzzwords; they form the foundation of India's long-term growth story and the reason we remain firmly bullish on Indian equities over the next three to five years. A robust democratic framework ensures policy continuity and institutional strength. Rising domestic demand, driven by aspirational consumption and increasing urbanization, provides a solid base for earnings growth. Our demographic dividend, with a young, tech-savvy population, is set to fuel productivity and innovation across sectors. Together, these drivers make India a structural, multi-decade opportunity. Volatility will come and go, but for long-term investors focused on quality businesses and strong governance, Indian equities will continue to be a powerful engine for wealth creation. Q) Which sectors are expected to deliver strong returns going forward? Any safe bets which investors can consider? A) We remain positive on banking, FMCG, and select PSUs like capital goods and power. Banking benefits from strong credit growth and improving asset quality, while FMCG is supported by easing input costs, and rural demand recovery. PSUs in capital goods and power are seeing a structural re-rating thanks to government infrastructure focus. For conservative investors, large-cap quality stocks in these sectors offer a relatively safe and steady opportunity aligned with India's long-term growth Q) How can high-net-worth individuals effectively build wealth in the current market environment? A) High-net-worth individuals should follow Ashika's philosophy of Invest Rightly, Switch Timely—investing initially in quality businesses with strong fundamentals and then actively adjusting portfolios as market conditions change. Balancing growth and capital preservation through disciplined stock selection and timely portfolio shifts, while focusing on governance and sustainable cash flows, is key to building resilient wealth amid volatility. Q) What is your take on Gold? Recently, it has crossed Rs 1 lakh in the physical market. Right time to increase allocation or should investors wait for some cool off? A) Gold has historically served as a reliable hedge against global uncertainty and volatile markets—evident from the aggressive buying by central banks in recent years. However, with macro conditions gradually stabilizing, the safe-haven appeal of gold may wane as investor sentiment shifts back toward equities. At this juncture, it may not be the most opportune time to enter gold. Investors would be better served by observing how global dynamics unfold before making fresh allocations.
Mint
30-04-2025
- Business
- Mint
Expert view: Profit booking on rallies may continue; banking, infra, FMCG appear promising, says Amit Jain of Ashika
Expert view: Amit Jain, the co-founder of Ashika Global Family Office Services, believes short-lived rallies will continue to be followed by quick corrections in the Indian stock market until there's more clarity on global trade and interest rate directions. In an interview with Mint, Jain said banking, infrastructure, FMCG, and healthcare appear most promising at this juncture, offering a mix of growth and defensiveness. Here are edited excerpts of the interview: The market struggles to sustain rallies because every uptick is quickly met with profit-booking amid global uncertainty. Factors like Trump's tariff moves, fears of a US recession, and volatility in crude oil prices keep sentiment cautious. Domestically, while fundamentals remain strong, valuations in certain pockets—especially mid- and small caps—have become stretched, prompting investors to lock in gains. Given the global noise, a 'sell on rally' mindset prevails, where traders are unwilling to hold risk for too long. This pattern of short-lived rallies and quick corrections will likely continue until there's more clarity on global trade and interest rate directions. Investors today find themselves at a tricky crossroads. Global markets, including India's, have absorbed the initial shock of Donald Trump's aggressive tariff decisions, but the underlying anxiety has not fully dissipated. If anything, it has evolved from panic selling to cautious scepticism. The peak panic around tariffs may be behind us, but markets remain fragile. Every rally is met with hesitation, as investors grapple with the real economic consequences of a prolonged trade stand-off. Supply chains are being reconfigured, cost structures are shifting, and global growth projections are being trimmed—none of which will resolve overnight. In this climate, investors should stay anchored to fundamentals. It's a time to avoid excessive risk, focus on quality balance sheets, and prioritise sectors with minimal direct exposure to global trade battles, such as domestic banking, FMCG, and capital goods. Tactical allocations to gold and selective large-cap names can also provide stability. The message is clear: cautious optimism is the way forward. Don't fear the volatility, but don't chase every rally either. India's domestic strength will drive sectoral outperformance over the next few years. Banking, infrastructure, FMCG, and healthcare stand out, offering a mix of growth and defensiveness. Investors should focus on sectors less exposed to global volatility and more aligned with India's internal demand story. After a significant correction, the IT sector is starting to offer selective opportunities for contrarian investors. While broad challenges remain, large-cap players with strong balance sheets and diversified client bases could lead the recovery as global tech spending stabilises. The best way to play this selectively is through IT Bees, which provides low-cost, diversified exposure to quality IT companies. The domestic consumption story remains one of the strongest pillars of India's growth narrative. Despite intermittent headwinds, underlying demand drivers—rising disposable incomes, urbanisation, premiumisation trends, and aspirational spending—continue to strengthen. While valuations in certain segments, such as discretionary consumption, have stretched, the recent market volatility creates more reasonable entry points. We believe staples, retail, and segments linked to premium rural demand offer attractive long-term opportunities. Domestic consumption is not just a cyclical story—it's a structural trend, and investors with a three—to five-year horizon should consider meaningful exposure to this theme. The current environment presents both risk and reward for mid- and small-cap investors. Given the market volatility, the focus should shift to companies with solid earnings visibility and a strong competitive edge in niche sectors—especially those benefiting from domestic demand or structural trends like digitalization, automation, and consumer premiumization. Rather than chasing growth at any cost, investors should focus on businesses with healthy balance sheets, the ability to pass on costs, and a proven track record of scaling operations. The strategy should be to buy into high-conviction stocks that are undervalued or temporarily out of favour but have long-term growth potential. It's about identifying businesses that can navigate challenges and emerge stronger once the economic landscape stabilises. Read all market-related news here Read more stories by Nishant Kumar Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions, as market conditions can change rapidly, and circumstances may vary. First Published: 30 Apr 2025, 08:11 AM IST
