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Time of India
15 hours ago
- Business
- Time of India
ETMarkets AIF Talk: Market-neutral AIFs well placed amid global headwinds: Puneet Sharma of Whitespace Alpha
Despite global headwinds such as U.S. tariffs, volatile FII flows, and uneven sectoral earnings, market-neutral strategies are proving resilient, says Puneet Sharma, CEO and Fund Manager at Whitespace Alpha – CAT III AIF. By balancing long positions in strong, liquid names with shorts in overvalued or structurally weak stocks, Category III AIFs like Whitespace Alpha aim to generate steady alpha without depending on market direction. Sharma notes that volatility and short-term dislocations actually create opportunities, making such strategies well placed to navigate uncertain market cycles. Edited Excerpts - Q) With Washington's additional 25% levy—doubling U.S. tariffs on Indian goods to ~50%—how does this hit Indian Inc.? by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like This Could Be the Best Time to Trade Gold in 5 Years IC Markets Learn More Undo A) We don't see this as a broad-based blow to Indian markets . The pain is mostly in a few export-driven sectors. For most large Indian companies, domestic demand is still the main growth driver, and that's holding up well. Exporters will find ways to adapt—whether by repricing, shifting product mix, or finding new markets. If the rupee stays weaker, that could also offset part of the tariff hit. So, it's more of a sector-specific challenge than a full market risk. Q) Do external headwinds make alpha generation more difficult? Live Events A) Not for the way we invest. We employ a market-neutral, rules-based strategy on top of a NIFTY ETF, so we're not dependent on markets rising. Volatility and short-term dislocations help us because they create opportunities to capture spreads between the index and individual stocks. The key is staying disciplined with position sizes and liquidity. Q) How are you reading the June-quarter results? A) Overall, Q1 was a mixed bag. Banks are still showing good asset quality, but saw a little pressure on margins. Autos were uneven, two-wheelers picked up, PVs were steady, but commercial vehicles were softer. In IT, parts of discretionary spending slowed, but cost controls kept margins stable. Industrial and capex-related companies continued to do well, while FMCG was patchy. With the monsoon improving, I'd expect rural demand and staples to do better in the second half. Q) What's your call on valuations—now that we've cooled from the highs, are we 'attractive'? A) We're not cheap yet, but valuations are more reasonable than they were a few months ago. Large caps look fine if earnings come through, and mid/small caps have corrected a bit, though it's still a stock-picker's market. For us, the focus stays on owning the benchmark and letting our market-neutral overlay do the heavy lifting over time rather than trying to time the market. Q) FIIs sold ~$4.17B in July across five sectors (₹17,741 crore net). Should domestic investors be cautious? A) Caution is fine; panic is not. FII flows are cyclical; we've seen them come and go. The good thing is that domestic SIPs and pension inflows remain strong and help balance out the selling. If you're investing for the long term, stick to your plan, maybe stagger your entries, and avoid leverage. If you want lower volatility, there are strategies like ours that focus on generating alpha without depending on market direction. Q) With heightened market volatility, how are Category III AIFs adapting their long-short equity strategies to maintain alpha generation? A) At Whitespace Alpha, we've built our Category III AIF to be truly market-neutral, so periods of volatility don't throw us off course. The way we run our long-short strategy is simple in principle but disciplined in execution, we balance our long book with positions in strong, liquid names and our short book with stocks we believe are overvalued or facing structural challenges. The goal is for both sides to work for us, not just one. We adjust our exposure and position sizes as market conditions shift, keeping our overall beta close to zero. This means we're not betting on market direction; instead, we're focused on generating steady alpha month after month, even when the broader market is swinging sharply. It's less about reacting to every headline and more about sticking to a framework that works through different market cycles.
Time of India
a day ago
- Business
- Time of India
US tariffs could shave 0.3–0.6% off India's GDP: Kotak Alternate's Jitendra Gohil
Q) With Washington's additional 25% levy—doubling U.S. tariffs on Indian goods to 50%—how are you reading into this for Indian Inc.? Live Events Q) Do you think with external headwinds the process of generating alpha will be more challenging? Q) How are you reading into June quarter results of India Inc.? Q) What is your call on valuations? Q) FIIs sold aggressively in July. Should Indian investors be cautious? Q) From a retail perspective, could money move to fixed income as volatility grips D-Street? Q) Which sectors look attractive? (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel In an exclusive conversation with ETMarkets Smart Talk, Jitendra Gohil , Chief Investment Strategist at Kotak Alternate Asset Managers , warned that Washington's move to double tariffs on Indian goods to 50% could shave 0.3–0.6% off India's GDP if the levies described the hike as a possible negotiation tactic aimed at pressuring Russia to end the war while weakening India's trade cautioned that the next two weeks will be crucial, as the outcome hinges on factors such as a potential US–China trade deal, government support for exporters and MSMEs, RBI policy actions, and currency movements. Edited excerpts:This is most likely a negotiation tactic aimed at pressuring Russia to end the war while also weakening India's position in trade negotiations. The next two weeks are extremely crucial. India is resisting, but these uncertainties may temporarily impact corporate profitability, investor sentiment, and short-term severity of the impact will depend on several factors, including the potential U.S.-China trade deal, government support for exporters and MSMEs, further RBI easing, and currency depreciation. If tariffs persist, the GDP impact could range from 0.3% to 0.6%. That said, the degree of negative impact on corporate earnings remains difficult to gauge at this is a favorable market for active fund managers, as seen in the divergence between large private banks and major IT companies over the past year. Markets often react to events in isolation, but a confluence of factors can offset the perceived instance, when the U.S. bombed Iran, analysts began pricing in higher oil prices, but few accounted for the potential supply increase from OPEC. Similarly, when recession fears gripped the U.S., many underestimated the scope for fiscal alpha in such an environment requires extraordinary effort in understanding macroeconomic and geopolitical developments, which often shape markets in unexpected quarter results were affected by seasonal and structural factors. We believe corporate earnings will be structurally weaker going forward—not because the economy is underperforming. In fact, the economy is strong and may even exceed earnings could be weighed down by heightened competition, record-high margins and ROEs, and businesses diversifying into unrelated areas. Expectations for the next quarter rest on a rural recovery and a strong festive season, which may lift valuations remain expensive and may stay so. To find value, one must look for turnaround stories, which are generally difficult and risky. It is essential to identify areas supported by emerging macroeconomic and political have been cautious on emerging markets, particularly India, due to tariffs, high valuations, INR depreciation, and a weak Q1. They remain underweight large-caps where earnings growth has been tepid, though midcaps have seen selective Indian investors are following a buy-on-dips strategy, which has helped cushion against large FPI exits. July is a good example of this a post-tax basis, plain-vanilla fixed income offers sub-par returns. Investors should diversify into REITs, commodities like gold and silver, and maintain long-term equity-oriented strategies to beat inflation. The financialization of savings into equities is a long-term trend, and these corrections are unlikely to derail it.A) In the short term, sectors tied to domestic consumption revival—such as hotels, consumer discretionary, and malls—look promising. Rural consumption is expected to pick up, benefiting tractors, select auto companies, and certain NBFCs and the IT sector may see further correction, valuations are reasonable, and we expect buying interest despite ongoing disruptions.: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
Economic Times
5 days ago
- Business
- Economic Times
ETMarkets PMS Talk: Indian equities fairly valued but need earnings boost, says Sanjay Chawla
Tired of too many ads? Remove Ads Thanks for taking the time out. With Washington's additional 25% levy—doubling U.S. tariffs on Indian goods to a punitive 50% - how are you reading into this for Indian Inc.? Tired of too many ads? Remove Ads Do you think with external headwinds the process of generating alpha will be more challenging? How are reading into June quarter results of India Inc.? Tired of too many ads? Remove Ads What is your call on valuations? We have some moderation from all-time highs but can we say that we are in the attractive zone? Foreign institutional investors have unleashed a brutal $4.17 billion selloff across five key sectors in July. FIIs turned net sellers to the tune of Rs 17,741 crore last month. Should Indian investors be cautious? Retail investors have played an important role in holding the market. But rising risk could pose a threat? From a retail perspective, do you agree that money could start moving towards fixed income space as volatility grips D-Street? Which sectors look attractive? In the latest edition of ETMarkets PMS Talk Sanjay Chawla , Chief Investment Officer – Equity at Baroda BNP Paribas Mutual Fund , shared his views on the current state of Indian equities , global headwinds, and sectoral he believes the markets are trading around their long-term averages, Chawla emphasised that a sustained earnings pickup will be crucial to justify downplayed the impact of recent U.S. tariff hikes on Indian exports, highlighting that the affected sectors form an insignificant part of the equity also touched upon the resilience of retail investors, the temporary nature of foreign portfolio outflows, and the potential in consumption and healthcare segments, even as geopolitical and macroeconomic uncertainties persist. Edited Excerpts –From a macro perspective, Indian exports to the US accounts less than almost half a percent of the GDP. Then there are certain sectors which are exempted. So the net-net impact would be even is of course assuming the most pessimistic scenario of exports coming to a complete standstill. That is not our base fact that most countries would have some tariffs would mean that India may not be economically at a disadvantageous the sectors which are likely to get impacted are not material part of equity Indices, the impact on the earnings is unlikely to be meaningful. However, the impact may be on a bottom-up basis and more from a sentiment by the trade negotiations with the other countries, I think the tariffs may settle down on a much lower are a couple of headwinds- trade barriers, global economic uncertainties, supply chain disruption, geo-political simmering at multiple locations. All these factors are leading to heightened of the factors are difficult to model in a traditional financial sense. As long as one stays focus on long term fundamental factors and usually ignores the 'noise' and manages the volatility, they would perhaps do date we have seen about 80% of the companies have reported their earnings. The PAT growth continues to be in single digit. While the earnings are aligned to expectations, the requisite run rate would be higher in coming quarters. It augurs well that festive seasons this time are well spread and come in earlier. It is expected that earnings may improve in the coming Indian markets are trading at long term averages. To make strong investment arguments at current valuations we need to see earnings improve from here so far have been in mid-single digits. Ground feedback from festive demand seems to be indicating a much better outlook. If that sustains and is reflected in earnings in coming quarters then current valuations may be have been overweight on India for a long time. Recent outflows may plausibly be on account of redemptions, or profit booking or alternative markets being cheaper and offering better potential the past also we have seen FPIs selling in the short term only to do a U turn once global factors this juncture, Indian markets tick almost all boxes from a global investor perspective: Good economic growth, stable currency, deficit under control, visible earnings growth and breath of investible opportunity can be assumed to be the global uncertainty the only factor against Indian investment is slower than historic earnings growth. Once that picks up we may see renewed interest by overseas is no denying the fact that retail investors have shown remarkable resilience and maturity and have been steadfast in their financial goals.I think they understand the difference between systematic risk (in terms of GDP, earnings and valuations) and unsystematic risk (global policy uncertainty and geopolitical tensions).They understand that eventually the domestic economy will do well leading to improved earnings. That is what they hope to capture by investing in Indian equity is very important to do your asset allocation and have the discipline to stick to the same to meet your financial goals. Risk appetite for equity investors is different from Fixed income investors. That is what is eventually reflected in potential recent tepid returns from equity markets is an outcome of heightened global uncertainty. Once the dust settles we should see earnings growth tracing the nominal sector, especially discretionary consumption, should see a pickup. First the personal tax cuts should increase the disposable income of the middle-class. Secondly, we usually see higher spending during festive. We hope to see the same trend Healthcare sector also offers interesting pockets of growth- Hospitals are expanding through brown field expansion, domestic demand is potentially stable. Opportunity in Contract Manufacturing (CMO) can be very is notwithstanding the potential tariff barriers. However, we suggest that investors should consult their financial advisor and according to their risk appetite consider the above sectors.: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
Time of India
6 days ago
- Business
- Time of India
ETMarkets PMS Talk: Indian equities fairly valued but need earnings boost, says Sanjay Chawla
In the latest edition of ETMarkets PMS Talk , Sanjay Chawla , Chief Investment Officer – Equity at Baroda BNP Paribas Mutual Fund, shared his views on the current state of Indian equities , global headwinds, and sectoral opportunities. While he believes the markets are trading around their long-term averages, Chawla emphasised that a sustained earnings pickup will be crucial to justify valuations. He downplayed the impact of recent U.S. tariff hikes on Indian exports, highlighting that the affected sectors form an insignificant part of the equity indices. Chawla also touched upon the resilience of retail investors, the temporary nature of foreign portfolio outflows, and the potential in consumption and healthcare segments, even as geopolitical and macroeconomic uncertainties persist. Edited Excerpts – Thanks for taking the time out. With Washington's additional 25% levy—doubling U.S. tariffs on Indian goods to a punitive 50% - how are you reading into this for Indian Inc.? From a macro perspective, Indian exports to the US accounts less than almost half a percent of the GDP. Then there are certain sectors which are exempted. So the net-net impact would be even lesser. This is of course assuming the most pessimistic scenario of exports coming to a complete standstill. That is not our base case. The fact that most countries would have some tariffs would mean that India may not be economically at a disadvantageous position. Since the sectors which are likely to get impacted are not material part of equity Indices, the impact on the earnings is unlikely to be meaningful. However, the impact may be on a bottom-up basis and more from a sentiment perspective. Going by the trade negotiations with the other countries, I think the tariffs may settle down on a much lower basis. Do you think with external headwinds the process of generating alpha will be more challenging? There are a couple of headwinds- trade barriers, global economic uncertainties, supply chain disruption, geo-political simmering at multiple locations. All these factors are leading to heightened uncertainty. Most of the factors are difficult to model in a traditional financial sense. As long as one stays focus on long term fundamental factors and usually ignores the 'noise' and manages the volatility, they would perhaps do well. How are reading into June quarter results of India Inc.? Till date we have seen about 80% of the companies have reported their earnings. The PAT growth continues to be in single digit. While the earnings are aligned to expectations, the requisite run rate would be higher in coming quarters. It augurs well that festive seasons this time are well spread and come in earlier. It is expected that earnings may improve in the coming quarters. What is your call on valuations? We have some moderation from all-time highs but can we say that we are in the attractive zone? Simplistically, Indian markets are trading at long term averages. To make strong investment arguments at current valuations we need to see earnings improve from here on. Results so far have been in mid-single digits. Ground feedback from festive demand seems to be indicating a much better outlook. If that sustains and is reflected in earnings in coming quarters then current valuations may be justified. Foreign institutional investors have unleashed a brutal $4.17 billion selloff across five key sectors in July. FIIs turned net sellers to the tune of Rs 17,741 crore last month. Should Indian investors be cautious? FPIs have been overweight on India for a long time. Recent outflows may plausibly be on account of redemptions, or profit booking or alternative markets being cheaper and offering better potential returns. In the past also we have seen FPIs selling in the short term only to do a U turn once global factors stabilize. At this juncture, Indian markets tick almost all boxes from a global investor perspective: Good economic growth, stable currency, deficit under control, visible earnings growth and breath of investible opportunity can be assumed to be available. Besides the global uncertainty the only factor against Indian investment is slower than historic earnings growth. Once that picks up we may see renewed interest by overseas investors. Retail investors have played an important role in holding the market. But rising risk could pose a threat? There is no denying the fact that retail investors have shown remarkable resilience and maturity and have been steadfast in their financial goals. I think they understand the difference between systematic risk (in terms of GDP, earnings and valuations) and unsystematic risk (global policy uncertainty and geopolitical tensions). They understand that eventually the domestic economy will do well leading to improved earnings. That is what they hope to capture by investing in Indian equity markets. From a retail perspective, do you agree that money could start moving towards fixed income space as volatility grips D-Street? It is very important to do your asset allocation and have the discipline to stick to the same to meet your financial goals. Risk appetite for equity investors is different from Fixed income investors. That is what is eventually reflected in potential return. The recent tepid returns from equity markets is an outcome of heightened global uncertainty. Once the dust settles we should see earnings growth tracing the nominal GDP. Which sectors look attractive? Consumption sector, especially discretionary consumption, should see a pickup. First the personal tax cuts should increase the disposable income of the middle-class. Secondly, we usually see higher spending during festive. We hope to see the same trend continuing. The Healthcare sector also offers interesting pockets of growth- Hospitals are expanding through brown field expansion, domestic demand is potentially stable. Opportunity in Contract Manufacturing (CMO) can be very meaningful. This is notwithstanding the potential tariff barriers. However, we suggest that investors should consult their financial advisor and according to their risk appetite consider the above sectors. ( Disclaimer : Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
Mint
01-07-2025
- Business
- Mint
Why does the Indian stock market expect better Q1FY26 results? Explained with four key reasons
Q1FY26 results preview: After almost four quarters of unimpressive earnings, hopes are high that the Q1FY26 earnings will cheer the Indian stock market up. FY25 was a mixed year for Indian corporates, with earnings witnessing widespread downgrades. Soft demand and tepid capital expenditure dragged the overall corporate performance during the last financial year. According to Nuvama Research, the aggregate profit after tax (PAT) of BSE 500 companies (excluding oil marketing companies) saw a modest growth of 10 per cent year-on-year in Q4FY25, and 9 per cent for the full FY25. This was down from a solid 21 per cent growth in FY24. Here are four key factors that indicate Indian Inc.'s performance in Q1FY26 will be better: The Nifty 50 delivered a 4 per cent year-on-year growth in Q1FY25, reporting the first quarter of single-digit EBITDA growth in four years. Experts believe the low base effect will play its part in Q1FY26. "Q1FY26 may be a better year-on-year, mainly because of the low base effect. Also, a lot of cyclical sectors, such as metals, oil and gas, are expected to do well," said Pankaj Pandey, the head of research at ICICI Securities. RBI rate cuts are a key indicator that suggests Indian corporate earnings will be better in FY26 than last year. "The results season for the April to June 2025 quarter will kick in. The larger section of companies is expected to benefit from three successive rate cuts by the RBI. The impact of the first two cuts will be felt on corporates' bottom lines, and this should help in better earnings," said Arun Kejriwal, Founder of Kejriwal Research and Investment Services. "Revenues or topline growth is expected when the liquidity infused by RBI through the CRR cut of 100 basis points in four tranches of 25 basis points each kicks in to match the festival season," said Kejriwal. India's gross collection of goods and services tax (GST) hit an all-time high of ₹ 22.08 lakh crore in FY25, up 9.4 per cent year-on-year, according to an official statement on 30 June. The record GST collection suggests that India's economic activity remained strong last financial year, which should translate into improved corporate earnings. India's inflation eased steadily in FY25, averaging around 4.8 per cent. The relatively moderate price rise meant that companies faced less pressure from input cost inflation. This environment likely supported better operating margins, contributing to improved corporate profitability. 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.
