Telecom, Auto, Insurance Among ITI AMC's Preferred Consumption Picks: CIO Rajesh Bhatia
ITI AMC CIO Rajesh Bhatia told NDTV Profit that high US tariff rate has posed additional challenges for Indian corporates to improve their earnings.
ITI Asset Management Co's preferred spaces in the consumption sector is telecom, automobile, and insurance, said Chief Investment Officer Rajesh Bhatia. Regulatory overhangs are behind insurance companies and have grown market share in recent years, he said in an interview to NDTV Profit.
"The country is in an excellent macro environment which is why there is no sharp correction in equity markets," he said. Indian markets only react whenever there is a threat in macroeconomic side. ITI AMC will turn constructive on India even with reduction of 25% tariff comes off the total tariff rate.
Rajesh Bhatia, Chief Investment Officer - ITI Asset Management Ltd was speaking to NDTV Profit's Executive Editor Niraj Shah.
"With this 50% tariff, there is definitely cause for concern. It will impact India's current account deficit because of a lag in exports. There can also be a capital account deficit as well," Bhatia said. "It will seep into the rest of the economy as well. Foreign institutional investors are not investing in the markets. Foreign direct investments may also get impact," he added.
According to Bhatia, high US tariff rate has posed additional challenges for Indian corporates to improve their earnings. When margins and profits are higher, top line growth is required to give impetus. "The top line growth translates to GDP growth, so different factors of which are challenged," he said.
The counter measures are interest rate cuts and GST reforms which have just been announced. "Hopefully, the government will bring more steps to negate the impact of tariffs. As of now, markets are not assuming that the 50% tariff will stay for too long," he concluded.
