Latest news with #SeshadriSen
Mint
4 days ago
- Business
- Mint
Trump Tariff Impact: Gokaldas Exports, Kitex Garments, KPR Mill, other textile stocks tumble up to 6%
Shares of several textile companies, including Gokaldas Exports, Kitex Garments, KPR Mill, and Alok Industries, declined sharply on Thursday after US President Donald Trump announced an additional 25% tariff on Indian goods. The latest move brings the total tariff burden on Indian exports to 50%. Kitex Garments share price extended its losing streak for the 11th consecutive session and was locked in a 5% lower circuit for the third straight day. KPR Mill shares plunged 6.18%, while Gokaldas Exports shares fell as much as 3.86%, and Indo Count Industries stock price dropped 3.15%. Welspun Living and Pearl Global Industries declined 3.7% each. The additional tariffs have been described by the US administration as a 'penalty' for India's continued imports of Russian crude oil. With these duties now 20% higher than those on Chinese goods, analysts warn that India's export competitiveness could take a significant hit. Export-oriented sectors such as textiles, IT services, engineering goods, and auto components are expected to bear the brunt of the fresh US tariffs, according to market experts. 'The most-impacted sectors are textiles (Gokaldas Exports and Kitex Garments), chemicals (Camlin Fine Sciences, Aarti Industries, and Atul Ltd), and auto ancillaries (Bharat Forge, Suprajit Engineering, and Sona BLW Precision Forgings), all of which have significant export exposure to the US,' said Seshadri Sen, Head of Research and Strategist at Emkay Global Financial Services. Gokaldas Exports derives nearly 70% of its total revenue from the US market. Indo Count Industries has a similar exposure, while US sales contribute about 65% and 50% to the revenues of Welspun Living and Pearl Global Industries, respectively. 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.
Economic Times
4 days ago
- Business
- Economic Times
Explained: What Trump's 50% tariff mean for stock market investors and should Nifty bulls worry
Indian stock markets face uncertainty due to potential US tariffs. Investors are hesitant, awaiting trade deal clarity. Export-oriented sectors like textiles and auto ancillaries are most vulnerable. Focus shifts to domestic consumption-based businesses. Analysts suggest buying opportunities may arise from market corrections. Long-term investors are advised to remain steady. The rupee's decline offers some respite for exporters. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads What should investors do? Tired of too many ads? Remove Ads The dip-buying opportunity Indian stock markets are trapped in a deadly waiting game as Trump 's crushing 50% tariff threat may slam the brakes on fresh investment flows, with many investors unwilling to commit fresh capital until a US-India trade deal materializes or a carnage hits Dalal Street, making it attractive enough to buy the Thursday's Sensex's muted 300-point drop suggests markets had partially priced in steeper tariffs, analysts warn the real carnage in export-facing stocks is just beginning, and the paralysis could persist for punitive tariffs on Russian crude imports have pushed total US duties to levels Nomura calls "similar to a trade embargo." The 50% rate, 20 points higher than China and 21 above Pakistan, threatens a bunch of export sectors worth billions of dollars."This is a tough period to navigate for investors," warns Seshadri Sen from Emkay Global . "The terms of the final trade deal could still be considerably different, though a worst-case, highly damaging scenario has presented itself."The carnage is already being mapped out sector by sector. Sen identifies the most vulnerable: "The most-impacted sectors are textiles (Gokaldas/Kitex), Chemicals (Camlin, Aarti and Atul), and Auto Ancs (BHFC/Suprajit/Sona BLW), with direct export exposure to the US."Nomura's analysis reveals the scale of destruction awaiting: "If effective, the steep 50% tariff would be similar to a trade embargo, and will lead to a sudden stop in affected export products. The lower value addition and thinner margins across a number of industries (textiles, gem & jewellery) could jeopardise operations, especially of smaller firms that will struggle to compete."Also Read | Trump doubles tariff on India to 50% over Russian oil purchase The US accounts for 18% of India's total exports and 2.2% of GDP, with key sectors seeing 30-40% of their global exports heading to America. For textiles, gems & jewelry, and leather companies operating on thin margins, the tariff wall could prove brokerage firm SBI Securities has warned of collateral damage to Indian companies operating US brands. "Stay away from US brands focussed domestic franchisees, as clamour to boycott US products and follow swadeshi model may grow," the brokerage cautions, naming Jubilant Foodworks (Dominos, Dunkin Donut), Westlife (McDonald's), Devyani International (Burger King), Varun Beverages (Pepsi), and Sapphire Foods (KFC, Pizza Hut) as vulnerable to "temporary enhanced selling pressure."Mahesh Patil of Aditya Birla Sun Life AMC draws parallels with Brazil's experience: 'We are now at par with Brazil, which provides a blueprint, it saw a 6-7% fall from the peak before recovering in local terms.'The rupee's decline, while painful, offers a counterintuitive benefit. 'The immediate casualty is the INR, which will take the brunt—this will provide some respite for exporters. Counterintuitively, a fall in the INR (once it stabilises) is positive for local earnings, and hence equities benefit with a lag,' Patil export sectors in the crosshairs, the investment playbook is shifting toward domestic consumption. SBI Securities recommends focusing on 'domestic-focused businesses like Cement, Hotels, Telecom, New Age Businesses, EMS players, Auto/Auto Ancillaries, Hospitals, Defence/Railways, and Alcoholic Beverages.'Ajay Sen of Emkay Global maintains conviction in India's structural resilience: 'We see the broader economy staying resilient and remain convinced of a 2HFY26 consumption-led recovery. We would look through any near-term volatility caused by this and buy a substantial dip (of more than 5%).'Several analysts are positioning the crisis as a potential goldmine for patient investors. Sen's four-point survival strategy includes: 'Buy the dip if the market correction exceeds 5% from here. Valuations would then be comfortably below the long-term average, and the direct impact on the listed universe's earnings is negligible.'Dr. V.K. Vijayakumar of Geojit Financial Services strikes a balanced tone: 'The market is unlikely to panic, but weakness will continue in the near term. Since uncertainty is high, investors should adopt a cautious approach.'Your investment strategy depends significantly on your investment horizon and risk appetite. Santosh Meena of Swastika Investmart advises long-term investors to stay the course: 'This development is part of ongoing global trade tensions and shouldn't distract from India's long-term growth potential. But short-term traders should exercise caution.'For long-term investors, the consensus remains surprisingly optimistic. India's domestic consumption story stays intact, with IT, pharmaceuticals, and electronics notably exempt from current tariff Patil concludes: 'Any knee-jerk correction in the market would be a good opportunity to increase allocation to equities, as the macroeconomic outlook and long-term fundamentals of India are fairly strong.'The 21-day countdown to tariff implementation has begun. Markets may be paralyzed now, but for those willing to look beyond the immediate chaos, the foundations for the next rally may already be forming.
Economic Times
01-08-2025
- Business
- Economic Times
Tariff woes temporary, India's equity story still intact: Seshadri Sen
So these are the three sectors where we intend to stay invested despite short-term cycles or volatility. "As for where the tariffs will land, predicting that is very difficult at this point. But it's a safe assumption that 25% is close to the worst-case outcome, and the final agreement will likely be around that or slightly better," says Seshadri Sen, Emkay Global Financial Services. Just grappling with how you manage to adjust to all the news flow that gets thrown at you regarding tariffs. The good thing, perhaps, if you look at it as a glass-half-full scenario, is that you at least know the worst-case possibility—maybe a 25% tariff. Although, looking at Canada this morning, where the tariff slabs have actually been increased, you never know which way this might go. How long do you think it will take for Indian markets to adjust to a 25% tariff reality, given that we were neither overvalued nor cheap? Seshadri Sen: You've touched upon the major issues. As for where the tariffs will land, predicting that is very difficult at this point. But it's a safe assumption that 25% is close to the worst-case outcome, and the final agreement will likely be around that or slightly better. That said, tariffs are only a small part of the overall India equity story. Yes, in the short term, a nasty surprise on the tariff front could lead to an immediate sell-off, possibly led by a reaction in the rupee. But in the medium term, tariffs don't significantly impact the broader India story. The most important driver for Indian markets over the next 12 months is the cyclical recovery—mainly in consumption—that's gradually building in the second half of this financial year. The primary driver of this is the monetary stimulus provided by the RBI. We are fairly confident that, come the festival season, we'll start seeing stronger consumption numbers, especially in discretionary segments. In fact, in the non-discretionary space, we're already seeing reasonably good numbers coming through. So yes, there may be short-term volatility around tariff news, but the key focus should be on whether we see a domestic cyclical recovery in H2. Oh yes, absolutely—and hats off to the central bank. They did everything they could with the bazooka they fired last time, and perhaps there's still more in the offing. But that's just one part—the global side of things. Domestically, what's your take on the earnings? They seem very mixed—case by case. No sector is performing consistently well; it's down to a few companies within each sector. Seshadri Sen: Yes, earnings haven't been particularly bad. We entered the season expecting a weak quarter. The macroeconomic indicators we tracked during the last quarter weren't very strong, so a soft earnings season was expected—and the market was prepared for it. In that context, the results have not been too disappointing. In absolute terms, yes, the numbers are weak, but relative to expectations, there haven't been any major negative surprises. And the proof of that is forward estimates for both Nifty and the broader market haven't taken a hit, unlike the period from October last year to April this year. So while earnings are weak, they aren't alarming at this point. There is, however, a lot of hope pinned on a second-half recovery. And you're right—within these relatively weak results, there are pockets of positive surprises, particularly among small- and mid-cap companies. When you say earnings aren't as bad as expected, could you help us understand which sectors you're pinning your hopes on? The IT sector hasn't seen much action, and even in banking, there have been disappointments. But auto and FMCG seem to be doing better. Based on the earnings, are you making any adjustments to your portfolio? Seshadri Sen: The earnings season has reaffirmed our sectoral stance. Our top overweights remain in consumer discretionary and industrials, and the current results haven't given us any reason to change that view. In fact, some industrial companies—especially in power equipment—have delivered fairly positive surprises. On the consumer discretionary side, while the overall numbers aren't exciting, we've seen some strong positive surprises despite the muted growth environment. So yes, our overweights in those two sectors remain intact. We've been negative and underweight on financials for some time, and the results here have been mixed. As for FMCG, it's a sector we're avoiding due to a structural negative shift. Valuations aren't attractive enough to justify taking risks there. I'd like to probe a bit more into your FMCG call. We're hearing of some green shoots in urban demand, while rural continues to outperform—though not across the full staples basket. Would you consider revisiting rural-focused themes or companies with strong rural exposure? Seshadri Sen: As a top-down theme, rural demand does appear attractive, but there's a lot more happening in that sector, so I'd still stay away. Generally, stock price performance in FMCG comes from margin improvement, not volume growth. Also, there's a structural change underway—both in advertising and distribution—that's narrowing competitive moats for many companies. So, trying to play a short-term rural bounce in that context feels risky. There could be a short-term trade in rural-heavy companies, yes—but until I see a clear path to improving margins and pricing power, I wouldn't be comfortable entering the sector. And frankly, despite the positive commentary around rural recovery, I don't yet see a convincing path to margin recovery. So what sector, in your view, currently has a strong moat and is somewhat decoupled from global moves? Seshadri Sen: I'm a bit wary of the word decoupled—nothing is truly decoupled. If there's a major global shock, India won't be immune. But with that caveat, there are three structurally strong sectors that I consider permanent themes in my model portfolio. Internet – Adoption is improving, business models are maturing, and execution has been strong across several companies. EMS (Electronic Manufacturing Services) – I'm a recent convert here. Growth is solid, and much of it is driven by import substitution, which is relatively immune to tariff disruptions. Domestic production still accounts for a small share of total electronics consumption, and this will rise further with favorable government policies. Airlines – We're adding two new airports in MMR and NCR in the next year. Globally, there's a shortage of new aircraft, which benefits incumbents in India. This gives them continued growth, market share gains, and pricing power. Current valuations don't fully reflect this upside. So these are the three sectors where we intend to stay invested despite short-term cycles or volatility.
Time of India
01-08-2025
- Business
- Time of India
Tariff woes temporary, India's equity story still intact: Seshadri Sen
"As for where the tariffs will land, predicting that is very difficult at this point. But it's a safe assumption that 25% is close to the worst-case outcome, and the final agreement will likely be around that or slightly better," says Seshadri Sen , Emkay Global Financial Services. Just grappling with how you manage to adjust to all the news flow that gets thrown at you regarding tariffs. The good thing, perhaps, if you look at it as a glass-half-full scenario, is that you at least know the worst-case possibility—maybe a 25% tariff. Although, looking at Canada this morning, where the tariff slabs have actually been increased, you never know which way this might go. How long do you think it will take for Indian markets to adjust to a 25% tariff reality, given that we were neither overvalued nor cheap? Seshadri Sen: You've touched upon the major issues. As for where the tariffs will land, predicting that is very difficult at this point. But it's a safe assumption that 25% is close to the worst-case outcome, and the final agreement will likely be around that or slightly better. That said, tariffs are only a small part of the overall India equity story. Yes, in the short term, a nasty surprise on the tariff front could lead to an immediate sell-off, possibly led by a reaction in the rupee. But in the medium term, tariffs don't significantly impact the broader India story. Explore courses from Top Institutes in Please select course: Select a Course Category Management Degree Public Policy Healthcare others Data Analytics PGDM Cybersecurity Others MBA CXO Product Management Project Management Design Thinking Finance MCA healthcare Technology Data Science Digital Marketing Leadership Data Science Operations Management Skills you'll gain: Duration: 10 Months IIM Kozhikode CERT-IIMK GMPBE India Starts on undefined Get Details Skills you'll gain: Duration: 9 Months IIM Calcutta CERT-IIMC APSPM India Starts on undefined Get Details The most important driver for Indian markets over the next 12 months is the cyclical recovery—mainly in consumption—that's gradually building in the second half of this financial year. The primary driver of this is the monetary stimulus provided by the RBI . We are fairly confident that, come the festival season, we'll start seeing stronger consumption numbers, especially in discretionary segments. In fact, in the non-discretionary space, we're already seeing reasonably good numbers coming through. So yes, there may be short-term volatility around tariff news, but the key focus should be on whether we see a domestic cyclical recovery in H2. Oh yes, absolutely—and hats off to the central bank. They did everything they could with the bazooka they fired last time, and perhaps there's still more in the offing. But that's just one part—the global side of things. Domestically, what's your take on the earnings? They seem very mixed—case by case. No sector is performing consistently well; it's down to a few companies within each sector. Seshadri Sen: Yes, earnings haven't been particularly bad. We entered the season expecting a weak quarter. The macroeconomic indicators we tracked during the last quarter weren't very strong, so a soft earnings season was expected—and the market was prepared for it. In that context, the results have not been too disappointing. In absolute terms, yes, the numbers are weak, but relative to expectations, there haven't been any major negative surprises. And the proof of that is forward estimates for both Nifty and the broader market haven't taken a hit, unlike the period from October last year to April this year. So while earnings are weak, they aren't alarming at this point. There is, however, a lot of hope pinned on a second-half recovery. And you're right—within these relatively weak results, there are pockets of positive surprises, particularly among small- and mid-cap companies. Live Events When you say earnings aren't as bad as expected, could you help us understand which sectors you're pinning your hopes on? The IT sector hasn't seen much action, and even in banking, there have been disappointments. But auto and FMCG seem to be doing better. Based on the earnings, are you making any adjustments to your portfolio? Seshadri Sen: The earnings season has reaffirmed our sectoral stance. Our top overweights remain in consumer discretionary and industrials, and the current results haven't given us any reason to change that view. In fact, some industrial companies—especially in power equipment—have delivered fairly positive surprises. On the consumer discretionary side, while the overall numbers aren't exciting, we've seen some strong positive surprises despite the muted growth environment. So yes, our overweights in those two sectors remain intact. We've been negative and underweight on financials for some time, and the results here have been mixed. As for FMCG, it's a sector we're avoiding due to a structural negative shift. Valuations aren't attractive enough to justify taking risks there. I'd like to probe a bit more into your FMCG call. We're hearing of some green shoots in urban demand, while rural continues to outperform—though not across the full staples basket. Would you consider revisiting rural-focused themes or companies with strong rural exposure? Seshadri Sen: As a top-down theme, rural demand does appear attractive, but there's a lot more happening in that sector, so I'd still stay away. Generally, stock price performance in FMCG comes from margin improvement, not volume growth. Also, there's a structural change underway—both in advertising and distribution—that's narrowing competitive moats for many companies. So, trying to play a short-term rural bounce in that context feels risky. There could be a short-term trade in rural-heavy companies, yes—but until I see a clear path to improving margins and pricing power, I wouldn't be comfortable entering the sector. And frankly, despite the positive commentary around rural recovery, I don't yet see a convincing path to margin recovery. So what sector, in your view, currently has a strong moat and is somewhat decoupled from global moves? Seshadri Sen: I'm a bit wary of the word decoupled—nothing is truly decoupled. If there's a major global shock, India won't be immune. But with that caveat, there are three structurally strong sectors that I consider permanent themes in my model portfolio. Internet – Adoption is improving, business models are maturing, and execution has been strong across several companies. EMS (Electronic Manufacturing Services) – I'm a recent convert here. Growth is solid, and much of it is driven by import substitution, which is relatively immune to tariff disruptions. Domestic production still accounts for a small share of total electronics consumption, and this will rise further with favorable government policies. Airlines – We're adding two new airports in MMR and NCR in the next year. Globally, there's a shortage of new aircraft, which benefits incumbents in India. This gives them continued growth, market share gains, and pricing power. Current valuations don't fully reflect this upside. So these are the three sectors where we intend to stay invested despite short-term cycles or volatility.
Mint
17-06-2025
- Business
- Mint
Stock market strategy: Cautious optimism amid valuation froth, Israel-Iran war; Small-caps, mid-caps still overheated
Indian stock markets have witnessed a strong rally since April, driven by macro tailwinds and investor optimism. However, experts now advise a more measured approach going forward, citing stretched valuations, geopolitical uncertainty, and sector-specific vulnerabilities. Seshadri Sen, Head of Research and Strategist at Emkay Global Financial Services, believes that after around a 10% surge in the Nifty 50 since April 9 — when tariff pause news lifted sentiment — the markets are likely to 'pause for breath.' He noted that the valuation comfort has largely dissipated, and the ongoing Middle East conflict due to the Israel-Iran war could act as a trigger for a short-term correction. The Israel-Iran conflict has added a new layer of uncertainty. According to Sen, the most immediate risk for India lies in the spike in crude oil prices, which could impact the current account deficit, fiscal position, and inflation. That said, he believes this shock is likely to be temporary. Structural factors such as the global energy transition and slowing Western economies suggest crude fundamentals remain weak. Foreign portfolio flows may also be volatile in the near term. However, Emkay Global remains confident in India's long-term story. 'Our fundamental thesis on Indian markets is unchanged as of now,' says Sen, although the brokerage will reassess its view if crude remains elevated over the next 2-3 months. On the earnings front, Emkay sees encouraging signs. FY26 Nifty EPS estimates have been stable, and the breadth of downgrades has narrowed significantly. The brokerage expects earnings to recover, driven by aggressive rate cuts from the Reserve Bank of India (RBI) and continued commodity softness, which will support margins. 'We believe we are at the bottom of the earnings downgrade cycle and see a possibility of upgrades,' Sen said. Emkay maintains its FY26 and FY27 Nifty EPS estimates at ₹ 1,128 and ₹ 1,294, respectively. From a valuation standpoint, Emkay Global and InCred Equities highlight concerns. The Nifty 50 is trading at 20.9x one-year forward P/E — slightly below the long-term average — but small- and mid-cap (SMID) stocks appear overheated. Emkay notes that 38% of BSE200 stocks now trade above their 5-year average valuation, up sharply from just 12% in April. Still, SMID stocks remain a favored area due to their stronger growth profiles and improving balance sheets. Investors, however, are advised to be selective, particularly when valuations exceed historical averages. InCred Equities has raised its bull-case probability for the market to 35% (from 25%) amid improving macro signals like above-normal monsoon prospects, expected repo rate cuts, and easing oil prices. As a result, it has marginally raised its Nifty target for March 2026 to 25,142 from 24,280 earlier. However, the brokerage warns that the recent broad-based rally has priced in much of the macro optimism, leaving limited short-term upside. Consequently, InCred is turning selective in its stock picks, booking profits in names like Adani Ports & SEZ and Cipla, and initiating coverage on mid-sized banks that benefit from improving liquidity conditions. Both brokerages agree on a more selective and sector-specific approach. Emkay favors Discretionary, Technology, and Materials, while remaining underweight on Financials and Staples. InCred is bullish on mid-sized banks and remains cautious on segments with inflated valuations. The near-term market strategy hinges on managing geopolitical risk, monitoring crude trends, and maintaining earnings discipline — all while navigating a landscape of stretched valuations with careful stock selection. 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.
