4 days ago
Cautious on IT, bullish on hospitals and consumption themes: Mayuresh Joshi
Mayuresh Joshi from Marketsmith India suggests that despite global challenges like Trump's tariffs, Indian markets are responding maturely. He emphasizes the strength of domestic flows and the importance of long-term systematic investments. Joshi is optimistic about consumption-driven sectors, financials, and agrochemicals, while remaining cautious on IT due to global competition and the need for reinvention.
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"In times like these, rather than getting shaken out, if you continue your systematic investments, they will yield results over time. So yes, while Trump tariffs took center stage this week, the markets have responded very maturely," says Mayuresh Joshi , Head Equity, Marketsmith yes, it was a roller-coaster week — one of the wildest rides you'd experience in any water park! The events that transpired, especially around Trump's tariffs, led to the correction we're currently the market's response has been quite mature, as you rightly pointed out. There's been no panic or abrupt sell-off. A large part of this resilience is due to strong domestic flows. The Indian retail investor seems to have figured out the secret sauce — staying invested for the long term. In times like these, rather than getting shaken out, if you continue your systematic investments, they will yield results over time. So yes, while Trump tariffs took center stage this week, the markets have responded very so much happening in both global and domestic markets. The tariff jitters continue, and uncertainties persist. On the domestic front, the first half of earnings wasn't great, but the second half is showing promise. FIIs haven't returned yet, so a clear direction for the domestic market is yes, that's the hope. Both urban and rural consumption are expected to make a strong comeback in the second half. For urban India, tax cuts are a booster. For rural India, better monsoons and higher farmgate prices for cash crops are leading to better realizations and a result, consumption is expected to pick up significantly. That's one leg of GDP growth. The second is investments — with government capex moving at a fast pace and private capex showing early signs of third leg, FDI and FPI flows, is lagging currently — mainly due to global uncertainties like Trump's tariff policies and weak earnings. However, if earnings start reviving and the tariff noise settles over the next 3–6 months, I don't see why FDI and FPI flows won't in a global context, is still a domestic-driven consumption economy. So even if investors are reallocating right now, I believe they'll come back in H2. Any non-structural market correction should be viewed as a buying opportunity — especially in quality sectors and stocks with leadership and earnings important economic event this week was the RBI 's credit policy. While rates were left unchanged, the Governor reiterated support for certainly a possibility. A 25-bps rate cut is still expected, possibly in the next policy or the one outlook depends on how global events unfold. Will the Fed move in September? What inflationary impact will Trump's policies have — not just in the US, but globally? How will he negotiate with India, China, and other BRICS nations?So yes, a 25-bps cut in the October policy ahead of the festive season is very much on the table. Let's see how the RBI navigates no one can predict the bottom. As our late founder often said, 'I've never seen a successful pessimist.'So I remain very optimistic about India over the next 5–10 years. It's still a fundamentally domestic-driven growth of Trump's policies, certain hospital stocks in healthcare can continue to do well. So can select pharma names — because manufacturing medicines cost-effectively inside the US isn't and consumption names also look attractive, especially domestic-focused value apparel brands, which could benefit from the rural and urban consumption recovery. FMCG is poised for a strong comeback. Agrochemical stocks too, due to strong monsoons and volume growth, may see improved operating leverage. Financials will also play a key role — as private capex returns, financials will support the broader yes, focus on domestic stories — consumption, financials, select autos, and agrochemicals. These areas are insulated from global noise like Trump tariffs and have solid earnings visibility. Don't get shaken by corrections. Instead, treat them as opportunities to enter stocks you may have missed healthcare, I'm positive on the hospital segment. The numbers have been stable and are expected to remain strong. These companies have adopted smart expansion strategies — both brownfield and greenfield — which keeps balance sheet leverage low. Average revenue per operating bed is improving, which boosts earnings the other hand, I remain cautious on IT. The sector still faces several headwinds. What seemed like a bright beacon a few decades ago now requires reinvention. Globally — including from Chinese companies — there's rising competition via AI-based platforms. AI is becoming the buzzword — be it generative AI, agentic AI, or agile IT companies need significant investment to stay relevant. The labor cost advantage they once enjoyed is diminishing as AI-driven models outperform legacy models. Until IT companies remodel and re-strategize, I'd remain circumspect. So for now, I'm avoiding the sector.
