In an interview with Kshitij Anand of ETMarkets, Bhattacharya said: “In the current environment of tariffs and a global economic slowdown, we prefer sectors like healthcare delivery and domestic consumption,” Edited excerpts:
Q) Thanks for taking the time out. Well, we started off April or the new financial year on a volatile note with tariff uncertainty. What is your take on markets for FY26?
A) We believe that the equity markets will see a recovery post the crash driven by Trump’s tariff war. We believe the Indian economy is well placed internally to grow despite geopolitical uncertainties.
Q) What is your take on US Tariff introduced by the Donald Trump government. How will it impact economy and Indian markets?
A) The tariffs introduced by the Trump administration are likely to trigger a degree of global trade uncertainty. For India, we anticipate some impact on exporters, primarily due to two factors:
a) Currency volatility that may arise as a consequence of escalating trade tensions, andb) Pressure on export volumes and realizations due to shifts in competitiveness vis-à-vis other geographies.While the direct impact on India may be limited compared to countries more deeply integrated with US trade flows, the broader ripple effect on global sentiment and supply chains could weigh on both the economy and markets.
Q) The chatter of a global slowdown becomes louder with new tariff measures in place from the US. How would that impact India and global economic growth?
A) A global slowdown would impact every economy including India as no one is insulated in this market.
Q) Do you think earnings of India Inc. might take a hit with tariff measures which would in turn result in earnings downgrades?
A) Yes, exporters are particularly vulnerable to earnings downgrades due to tariff measures. Sectors that could be impacted include IT services, auto component manufacturers, and companies in the defence and electrical equipment space.
These industries rely heavily on overseas markets, and any tariff-related headwinds could directly affect their top line and margins.
Q) Which sectors should one look for to deploy fresh money amid tariffs and global economic slowdown?
A) In the current environment of tariffs and a global economic slowdown, we prefer sectors like healthcare delivery and domestic consumption.
These are largely India-focused, relatively insulated from global headwinds, and less sensitive to currency fluctuations, making them more resilient investment themes at this stage.
Q) How are HNIs and big-ticket investors allocation money? Are they diversifying globally or buying treasures to protect the portfolio?
A) Difficult to make a generic statement on this. However, the savvier investors are looking to deploy based on individual bottom-up stock picking.
Q) How should one play small & midcaps in FY26?
A) One should go overweight in small, and midcaps post the recent fall. It has become clearer that the dominance of the larger companies in India is getting challenged owing to innovation by smaller companies and that is a mega trend here to stay.
(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
