Mayuresh Joshi in an interview to ET Now highlighted domestic policy measures and global factors. “ GST rationalization is very positive—it should start boosting volumes and margins from Q3, which is badly needed by India Inc. We’ve seen green shoots in rural and urban consumption, so this is a welcome move. If there’s any resolution on the additional 25% tariffs from Trump in the coming weeks, the market could emerge from this long consolidation phase. Earnings will be the key trigger from Q2, and I expect significant improvement in Q3.”
Metals emerged as the top sectoral gainer, led by Nalco and Jindal Steel. Joshi explained, “Several factors are supporting the sector: expectations of a US rate cut in September, better economic data, and India-China ties. Low global inventory could improve pricing. Domestic-focused companies may perform better due to volume growth and import restrictions. Coal India and NMDC did well last week, and among non-ferrous stocks, Hindalco stands out due to its backward integration in alumina and bauxite. Among steel makers, JSW Steel is relatively better placed due to domestic synergies.”
Despite positive indicators like the S&P upgrade, 7.8% Q1 GDP growth, and GST rationalization, markets have remained cautious. Joshi noted, “Markets need to see an earnings reset. Q2 will provide a base, and Q3 should show actual positive numbers. What Trump does with tariffs will remain on the mind of foreign investors. Domestic investors are showing strong faith through SIPs, and as resolutions occur, markets will respond. Valuations are no longer cheap, so we need positive triggers.”
On sectoral strategy, Joshi advised a selective approach. “You should follow a sector-wise approach. FMCG may continue doing well, with Marico as a top pick. Domestic apparel makers like Vishal Mega Mart and VMart Retail could benefit from GST rationalization and better rural and urban consumption. Footwear stocks like Relaxo and Campus Activewear have attractive risk-reward. Hotels are also well-placed, with rationalization, travel demand, and stable average room rates. ITC and Lemon Tree remain positive picks. Domestically focused capital goods and manufacturing companies may continue performing well.”
With GST rationalization, tariff uncertainties, and selective sector strategies, market participants are expected to watch Q3 earnings closely as a potential trigger for renewed momentum.
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