Saurabh Mukherjea's Top Investment Themes As He Looks Beyond Macro Indicators

Contrary to the common perception, conventional and high-frequency macro indicators such as forex movements, interest rate cycle, gross domestic product, inflation should hold zero value to equity investors, according to Saurabh Mukherjea.The environment of the country in terms of infrastructural development and holistic growth plans from a decade-on-decade perspective holds more relative weightage on the performance of the domestic equity market, according to founder and chief investment officer at Marcellus Investment Managers Pvt."Doubling of the highway network, magnification of broadband connectivity, increase in the number of bank accounts (and) propulsion in airline connectivity in the last decade are certain examples of factors that affect the canvas of how investee companies operate," he told BQ Prime's Niraj Shah in an interview.These nation-centric factors as compared to global macro pillars are more sensitive to the prosperity of the Indian middle class, thereby being of much more importance to equities, Mukherjea said..Half of the petrol sales of India's oil retailers come from stations along the highways. According to Mukherjea, that implies an increase in the road travel due to better connectivity of highways and shorter travel time. It also means meaningful coverage of India's geography and more road usage for transport of goods and travel, which is profitable for investee companies under the road transport ecosystem, Mukherjea said. Credit offtake is also at an 11-year high. Despite rising interest rates, banking crisis and geopolitical tensions, the credit growth in India grew by 17%, indicating pent-up demand in the country, he said. .API, Specialty ChemicalsThe active pharmaceutical ingredient market is alone worth $200 billion, of which India accounts for just 10%, Mukherjea estimated. "Even If we pull away 10% of China's share in the next three–four years, we may make it a $50-billion industry."Small companies that are poorly covered, known and misunderstood at present may rise as the next-generation primary players in the field of specialty chemicals, he said. .Electronic Manufacturing ServicesApart from iPads, laptops and phones, ever-evolving electronic devices in healthcare and medicine is an attractive area to keep an eye on, Mukherjea said. The worth of this industry is about $500 billion, of which India's share sums up to $200 billion, he estimated.With a gradual shift of warehouses of global electronic manufacturing companies from China to India, the country's share is bound to improve, according to Mukherjea. .Financials And BanksUPI and big data storage in smartphones is going to ramp up the speed of credit dispersal on a colossal scale from a long-term view, Mukherjea said. This could make the availability of car and home loans in a few minutes a possible endeavour, he said.Therefore, large lenders who are already well-equipped, tech-savvy and are enriched with hundreds of electrical engineers and data scientists are more likely to reduce their cost-income ratio and pick up growth momentum in the near future, he said.

Saurabh Mukherjea's Top Investment Themes As He Looks Beyond Macro Indicators

Nation-centric factors are more sensitive to the prosperity of the Indian middle-class, says Marcellus founder.

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