The current financial year is "not such a big problem" as the earnings tailwind is expected to sustain, according to Ganeshram Jayaraman, managing director of Avendus Spark Institutional Equities.
However, Jayaraman is "not yet fully confident" of the next fiscal and beyond, he told NDTV Profit's Niraj Shah. Therefore, he advised investors to adopt a "barbell" strategy as some sectors are likely to witness "pretty strong" tailwinds, while others will be faced with headwinds.
The impact of macro factors on India would be to a lesser extent as compared with other countries, although it does have an effect, he said.
There was generally not much concern about rate hikes in the initial period, Jayaraman said.
Navigating Consumption
Over the last three to four quarters, caution has been exercised regarding consumption. Signs of a slowdown in mass consumption have been observed, according to Jayaraman.
Certain lead indicators, such as jobs in the IT sector, wage hikes and growth in savings bank balances were not showing improvement, highlighting increased caution in these aspects, he said.
Jayaraman said the growth journey of unsecured personal loans continues at a rate of 25% and underscored the RBI's intervention to curb the relentless rise. "We think banks and NBFCs will moderate their expectations on unsecured personal loans."
Outlook On Capex Cycle
The corporate capex cycle is expected to gain momentum, benefiting corporate balance sheets, he said. As banks ease off on retail credit, they are expected to redirect focus towards corporate credit, contributing to a pick-up in the property sector as well.
The emphasis is on private capex cycle-related names, especially those associated with the property cycle. This strategic move is what investors are increasingly advised to consider, Jayaraman said.
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