The answers will be very clear. With the kind of ROCs that the formulation generic companies are making today, I do not think they have too much room in terms of taking a significant hit from there on and even in the case of the APIs or the CRAMS business, I do not see too much of a challenge over there.
Similarly, for some of the other sectors also, we will have to evaluate but yes, at this point in time, obviously the sentiment has been hit, even from the auto and auto-ancillary perspective, which is going to be sometime in May. So, there is some time before that one would hope that there is going to be some reversal of action. Of course, the other way to look at it is that at least as far as the domestic economy is concerned, India has a lot of businesses that are fairly insulated from some of these global challenges. Some of the portfolios will have to be aligned to that also.
India has been underperforming its global payers for the last few months in the market drawdown. Now, the dollar index has cooled off and the oil has also come down. So, it is a good macro situation and we are also hoping for a better earning season. Despite that ,given the looming threat of the tariffs and the massive inflationary effect it will have the world over, it is likely to disrupt the supply chains as well. How long is India going to remain insulated from all of this? We cannot remain decoupled for a very long time despite having a ripe environment now for Indian markets to move up? Sachin Shah: I completely agree with you. This decoupling story has not really worked most of the time because all said and done, the capital flows are very interlinked from one region to another region and the sentiments also are very much moving in the same direction most of the time across the region. Those are the challenges when it comes to the capital market movements, whether it is India, whether it is the US, whether it is some of the other emerging markets or developed countries. It is all fairly interlinked in that sense. But the important way to look at it is that market valuations are going to get very reasonable. If we can identify businesses, solid businesses which will do pretty decently over the next two, three, four years, this may be a very interesting time for guys who were sitting on the fences and trying to get into the markets at very reasonable valuations. That is a big positive way to look at it because there are quite a few businesses which probably are going to be very solid over a period of time because their value propositions are very strong irrespective of them being domestic businesses or export businesses. I will not even be worried with some of those export businesses because the value proposition is strong and if the customer audience can really appreciate the value that they bring to the table, at some point in time, they will get their fair share of market share. Given the fact that the way how the market construct has changed over the last two weeks, after the correction, we saw recovery and then we outperformed global peers. We were then talking about sectors that we can bet on given that the valuations were reasonable. Banks were the one that stood out. Hopefully now we have the next MPC meeting next week where we may see some sort of easing on that particular front. So, how does the first half or the second half of FY26 look to you given that all of these little perks will come to play, which means consumption will now be a sector one can comfortably bet on?Sachin Shah: Clearly, private sector banks are something that even we favour at this point in time. In fact, we have been favouring them for a while now and because of two-three reasons. One is that the valuations over there have become very reasonable for a while now. Second, a lot of actions by RBI over the last few months and because of that, the liquidity has been easing out quite significantly and those actions will have even further positive repercussions over the next few quarters, which will also help the discretionary consumption in the domestic markets to do much better.
Third, the rural market economy seems to be having a decent amount of rebound and there are very visible signs of green shoots there. So, you are right in a way as a lot of these domestic focused businesses clearly will have to be a decent allocation in each of these portfolios for FY26. At the same time, also selectively in some of these export-oriented businesses where we believe the value proposition is very strong.
In fact, India is relatively better off because the tariffs imposed are lower than some of the other countries we are competing with in the global markets for our goods that we supply to the global supply chains. So, there we will have some advantage.
These are the times when there will be a lot of noise. Let all this settle down in a week or two and then it will be easy to identify some very good businesses and reasonable balance sheets.
