'Everything Thrown Out Of Window': Manishi Raychaudhuri On US Tariffs As He Picks Private Banks

The US tariff rate of 50% on Indian goods has kept investors on edge due to the impact of trade costs on the economy which may likely act as a near-term trigger for the Indian stock market. Global economists are still trying to analyse the ripple effect of the high tariff costs once implemented, even as India awaits its next round of negotiations with the US officials.

In the current market scenario, D-Street expert Manishi Raychaudhuri, CEO of Emmer Capital Partners, told NDTV Profit in an exclusive interview that the US tariffs have added an 'extra layer of uncertainty' for investors, apart from low earnings growth and valuation premiums. He has picked private banks as a potential growth sector from the longer-term perspective.

Raychaudhuri told NDTV Profit that the current US-India trade deal scenario juxtaposes against how things were a year ago when India was in a 'geopolitical sweet spot'. "Now, everything is thrown out of the window," he said.

The expert said investors see the upcoming round of negotiations between India and US after Aug. 25 as a 'bargaining tip'. "So, this is an additional layer of uncertainty for the Indian market apart from earnings estimates decline and valuation premium," said Raychaudhuri.

Raychaudhuri has estimated the FY26 earnings growth to be near 10-12%. However, he added that this estimate was pegged near 16-17% around four to five months ago, so the current estimate is a decline. "There could be more downside going by the commentary from most of the corporates this season," he warned.

The market expert believes that from the short-term perspective, there are hardly any potential growth pockets. "However, if an investor has a slightly longer-term outlook, maybe over the next two to three years, then private banks look attractive to us," said Raychaudhuri.

"Private banks are gaining market share and have better technology along with asset quality compared to public sector banks," he explained.

According to the expert, defence is also likely to remain a strong sectoral pick, despite high valuations. "Consumer discretionary, especially hospitals and diagnostics are also strong picks, however, valuation sensitivity would be imperative here also," claimed Raychaudhuri.

The expert is not constructive on consumer staples, and is not positive on the IT despite the fact that the sector has corrected. "Until the traditional IT giants re-invent themselves, it would be very difficult for them to maintain their growth rates and margins due to AI risks," he concluded.