Latest news with #ChakriLokapriya
Time of India
22-05-2025
- Business
- Time of India
PSU banks, select private lenders remain attractive despite global market jitters: Chakri Lokapriya
"All this will take away the focus of the company from its core lending and borrowing business and instead focus on fixing the house. So, growth and operations is a casualty," says Chakri Lokapriya , CIO-Equities, LGT Wealth. What do you make of the market set up right now? Chakri Lokapriya: Clearly, with the US fiscal deficits turning out to be higher, it is now almost like there will be some form of tariff impact on all the other countries, India included. Against this backdrop where we have an RBI surplus which is going to be released sometime in the next few weeks, that can help India to do defence spending, capex spending, so that will support earnings, India corporate earnings, so that is the next support to watch for and, of course, the RBI rate cut. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Play War Thunder now for free War Thunder Play Now So, how important is the spike in bond yields and what kind of impact do you think that could have? Chakri Lokapriya: The impact of that is clearly a bit unnerving at one point. So, the only thing that will help in as far as India is concerned is we should see evidence of an earnings acceleration, because so far we have seen only earnings downgrade, only then it will justify the valuations going forward. Let us analyse some numbers and InterGlobe Aviation , it is, of course, a strong forecast for FY26, the management believes that all those geopolitical turbulences could very well be behind them. What is it that you anticipate in terms of where the stock could actually move from here and do you sense further upside? Chakri Lokapriya: InterGlobe clearly in the short to medium term is well positioned. It has a few things going in its favour which is oil is down and that is the biggest component of its raw material costs, fuel cost, and outside of that traffic growth continues to remain strong. Live Events And now in the traffic, in the peak season that we are going into which they do not have presence, that is the international segment, they are launching a new segment that may add some incremental bit, but not really, but just the domestic factor setup in itself the outlook for InterGlobe is good. In any case, I am sure everyone must have already exited IndusInd Bank , but what is it that you are making of the commentary because it is not just about core profitability or that one-time adjustment of forex, but there are many one-offs which I guess have led to this massive loss that they have incurred. Chakri Lokapriya: You are absolutely right. In this environment when a new CEO is going to come, it is going to impact a lot of changes, operational changes, operational uncertainty within the bank on top of their existing problems of asset quality, provisioning, accounting issues. So, it is best avoided and not touch for quite some time until things settle down. What is your view on IndusInd Bank, I mean, it just everybody knows the bad news. We know that there is a derivative laws. We know that there is a problem in MFI. And we know that there is no CEO. I mean, are markets pricing all the bad news? Chakri Lokapriya: I do not think so, simply because while the market might be pricing in news, what is still uncertain is about how will whoever is the new CEO, interim, how the operations are going to be run? How is it going to be cleaned up? All this will take away the focus of the company from its core lending and borrowing business and instead focus on fixing the house. So, growth and operations is a casualty. I was just looking at the charts of BEL and the stock is pretty much around its 52-week highs. We have seen a renewed vigour within the entire defence pack as soon as the geopolitical tensions with the neighbour actually sprung up. Wanted you to tell me that other than BEL, where is it that there is valuation comfort within purely the defence pack. Chakri Lokapriya: Within the defence pack, well Bharat Electronics clearly is well positioned as you say. Hindustan Aeronautics, Mazagon Dock are also looking good. These are all one-off companies in terms of not too many people can make submarines, not too many people can make aircrafts. And outside of that somehow related thing would be railways, but the simple fact that now with the increased scrutiny and border controls, it is likely to see more railway penetration across all the more sensitive areas and therefore, companies like Titagarh Wagons , Jupiter Wagons all these companies are also likely to see, given that they have corrected quite significantly. Just wanted to understand given the market construct right now and all the dynamics at play, is there anything that you are overweight on currently or recommend buying in this market or would you say just sit back because you do not know how the global markets are really going to pan out from here while we have done okay from those March end lows, but guess this is not it. Chakri Lokapriya: You are right, in terms of, we have rebounded quite sharply over the last month and a half, against the backdrop of earnings not actually being cut in this current quarter but we would still be overweight financials and industrials because that is where there will be tailwinds with an RBI rate cut and eventual uptick in corporate earnings and therefore spent. So, I think those are the two areas, within that PSU banks and some of the obvious names in private banks and within industrials the EPC companies. Also, give us some sense that what are you really pencilling in when it comes to the pharma space because just yesterday, we have seen the pharma index was actually in the pink of health and of late, it did not participate much in the kind of selloff or rather volatility that we have seen. Do you believe this still offers value and one should look at for a long-term opportunity, well of course, with earnings CDMO as a segment has done very well. Chakri Lokapriya: The pharma sector is clearly still wait and watch of the US tariffs. The US tariffs actually in the case of pharmaceuticals there is one rate for the branded drugs and one rate for the non-branded, generics, and the non-branded is where largely India belongs. So, there the tariffs are likely to be much lower, but even assuming that there are a 10% tariff that we have in any case, that is largely baked into the numbers and so if that is the number that it turns out with the trade talks, pharma as a sector, companies like Sun they will show that 10% types of growth, they are positioned and the valuations are not heated, so whether it is Sun or Cipla, or Lupin all these companies are positioned for about like a 15-20% upside.
Economic Times
08-05-2025
- Business
- Economic Times
How will India-UK FTA affect Indian alcobev stocks?
Live Events (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel Mumbai: Shares of most Indian alcohol companies fell on Wednesday after India and the United Kingdom finalised a Free Trade Agreement (FTA) that includes deep cuts in import duties on Scotch whisky and gin. The move is expected to make imported liquor more affordable in India, a development that may challenge local liquor brands in the premium and luxury the new FTA, India has agreed to cut import duties on Scotch, whisky and gin from 150% to 75% with immediate effect, with a further reduction to 40% over the next 10 years. This means that imported spirits, especially premium Scotch, will become much cheaper for Indian of Som Distilleries and Breweries fell 4%, Radico Khaitan and Piccadilly Agro declined 3% each. Companies fear that cheaper Scotch could erode the market share of Indian-made premium liquor. But not everyone is Spirits, India's biggest liquor company and part of the global Diageo group, could emerge as a big winner from this deal. That's because 32% of its sales already come from luxury and premium brands, many of which are imported Scotches bottled in origin (BIO). Shares of United Spirits gained 0.9%."While competition from imported scotch whiskey (no of cases) might increase, the Indian Alco-beverage sector, which uses bulk whisky as raw material for blended Scotch, stands to benefit," said Chakri Lokapriya, CIO - Equities, LGT Wealth taxes make up around 15% of the retail price of imported Scotch in estimate the new tariff structure could lead to price drops of 8-20% over time, making imported brands much more lower duties, these premium imports could see stronger demand and higher volumes. Analysts estimate that United Spirits' BIO Scotch portfolio could grow at a compound rate of 33% over the next three years, driven by rising affordability and changing consumer Diageo's global supply chain means United Spirits is well-positioned to scale up its Scotch offerings without major cost pressures. Even if profit margins from imported Scotch remain limited (around 10%), the sheer volume growth is likely to boost the company's overall companies like Radico Khaitan may face more direct pressure. However, they also import Scotch in bulk to blend with Indian spirits, so cheaper raw material could help them cut costs and improve margins. Radico's super-premium products, which use imported Scotch for blending, could see a margin gain of about 100 basis points, according to analysts."Radico imports the bulk of scotch for blending premium products. This could reduce raw material costs significantly for Radico, which can lead to expansion of gross margin by ~100 bps helping Radico's super-premium portfolio (~10% of IMFL revenue)," Lokapriya while competition may increase, some Indian firms could still benefit by using cheaper imported ingredients to make better-quality products at more competitive prices.
Economic Times
28-04-2025
- Business
- Economic Times
ETMarkets Smart Talk: Investor bearishness at highest levels since 2009, says Chakri Lokapriya
Live Events (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel In this edition of ETMarkets Smart Talk, Chakri Lokapriya , CIO - Equities at LGT Wealth India, shares his insights on the current market turbulence triggered by the US tariffs on global points out that fear, rather than valuations, is driving market sentiment, with investor bearishness at its highest levels since discusses the potential impact on India's economy , sectors to watch amid global uncertainties, the outlook for corporate earnings , and how investors — both domestic and foreign — are positioning themselves in these volatile times. Edited Excerpts -A) The markets resumed their fall on the 3rd of April due to the US imposing Tariffs on goods imported from 180 countries into America. The tariffs were imposed to lower trade imbalances and deficits in the U.S.A. Markets fear that Trump's tariffs could raise US inflation, pulling down economic growth worldwide. Fear is the driving force in the market rather than valuations. The 90 day pause on tariffs gives countries to reach bilateral agreements with the US and hence FY26 is likely to be very volatile.A) The Indian Govt is among 6 out of 180 countries that have offered concessions on US imports into India and would viewed positively by Trump.A) Indian Govt sources indicate a 90-day pause. Until then, 10% tariffs Goel, Minister of Commerce, leading a team working with the US Govt to arrive at a bilateral agreement. However, in the interim GDP growth is likely to slowdown by 30 to 50 bp.A) With Gold at all time highs, it is recommended to have a neutral allocation to Gold.A) The tariff uncertainty is likely to make companies pause on new capital expenditures and expansion plans until the new tariff rates are finalized over the next 90 days until June. As a result, it is likely that Corporate India would remain cautious leading to 3-5% earnings cut for FY26.A) Incrementally staggering purchases in domestic sectors such as Financial Services and consumer discretionary could be considered, depending on one's ability to put capital at risk.A) Investors are likely to remain fairly liquid and deploy on corrections. Investor bearishness is the highest since March 2009.A) While valuations are one standard deviation below 5-year averages, further fall is not ruled out until bilateral trade talk news between India and the U.S. trickle out over the next several weeks. Accordingly, markets would be volatile as they digest news flow.A) Investors should focus on companies which have strong earnings outlook, irrespective of whether they are large, mid or small cap companies.A) Interest rates need to fall further in India, which would aid as a growth catalyst. FII will return to India once they see evidence of earnings growth revival which is at least couple of quarters away.(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
Time of India
28-04-2025
- Business
- Time of India
ETMarkets Smart Talk: Investor bearishness at highest levels since 2009, says Chakri Lokapriya
In this edition of ETMarkets Smart Talk, Chakri Lokapriya , CIO - Equities at LGT Wealth India, shares his insights on the current market turbulence triggered by the US tariffs on global imports. Lokapriya points out that fear, rather than valuations, is driving market sentiment, with investor bearishness at its highest levels since 2009. He discusses the potential impact on India's economy , sectors to watch amid global uncertainties, the outlook for corporate earnings , and how investors — both domestic and foreign — are positioning themselves in these volatile times. Edited Excerpts - Play Video Pause Skip Backward Skip Forward Unmute Current Time 0:00 / Duration 0:00 Loaded : 0% 0:00 Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 1x Playback Rate Chapters Chapters Descriptions descriptions off , selected Captions captions settings , opens captions settings dialog captions off , selected Audio Track Picture-in-Picture Fullscreen This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Text Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Transparent Caption Area Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Drop shadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Q) We started off April or the new financial year on a volatile note with tariff uncertainty. What is your take on markets for FY26? A) The markets resumed their fall on the 3rd of April due to the US imposing Tariffs on goods imported from 180 countries into America. The tariffs were imposed to lower trade imbalances and deficits in the U.S.A. Markets fear that Trump's tariffs could raise US inflation, pulling down economic growth worldwide. Fear is the driving force in the market rather than valuations. The 90 day pause on tariffs gives countries to reach bilateral agreements with the US and hence FY26 is likely to be very volatile. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Free P2,000 GCash eGift UnionBank Credit Card Apply Now Undo Q) What is your take on US Tariff introduced by the Donald Trump government. How will it impact economy and Indian markets? A) The Indian Govt is among 6 out of 180 countries that have offered concessions on US imports into India and would viewed positively by Trump. Q) The chatter of a global slowdown becomes louder with new tariff measures in place from the US. How would that impact India and global economic growth? A) Indian Govt sources indicate a 90-day pause. Until then, 10% tariffs apply. Live Events Piyush Goel, Minister of Commerce, leading a team working with the US Govt to arrive at a bilateral agreement. However, in the interim GDP growth is likely to slowdown by 30 to 50 bp. Q) Gold hit fresh record high while equity markets witnessed a knee jerk reaction post tariff announcement. Does it make sense to increase allocation towards Gold? A) With Gold at all time highs, it is recommended to have a neutral allocation to Gold. Q) Do you think earnings of India Inc. might take a hit with tariff measures which would in turn result in earnings downgrades? A) The tariff uncertainty is likely to make companies pause on new capital expenditures and expansion plans until the new tariff rates are finalized over the next 90 days until June. As a result, it is likely that Corporate India would remain cautious leading to 3-5% earnings cut for FY26. Q) Which sectors should one look for to deploy fresh money amid tariff and global economic slowdown? A) Incrementally staggering purchases in domestic sectors such as Financial Services and consumer discretionary could be considered, depending on one's ability to put capital at risk. Q) How are HNIs and big-ticket investors allocation money? Are they diversifying globally or buying treasures to protect the portfolio? A) Investors are likely to remain fairly liquid and deploy on corrections. Investor bearishness is the highest since March 2009. Q) After recent correction how is India placed among EM players in terms of valuations? A) While valuations are one standard deviation below 5-year averages, further fall is not ruled out until bilateral trade talk news between India and the U.S. trickle out over the next several weeks. Accordingly, markets would be volatile as they digest news flow. Q) How should one play small & midcaps in FY26? A) Investors should focus on companies which have strong earnings outlook, irrespective of whether they are large, mid or small cap companies. Q) What about FIIs? What is the trend you see for smart money moving back to India? A) Interest rates need to fall further in India, which would aid as a growth catalyst. FII will return to India once they see evidence of earnings growth revival which is at least couple of quarters away.
