Rushabh Sheth from Karma Capital Advisors believes because India mostly remains an economy driven by domestic, it must eliminate the impact of every recession in the US and other countries.
Consumers and the Indian company sector are in good condition that must continue to encourage the economy together with various government infrastructure and reform programs, said Co-Cio and Co-founder.
Experienced for more than two decades in managing money, especially in registered equity, Sheth said that karma capital will remain careful when taking a position in the IT space because even though the assessment has become more reasonable, there are risks related to income cutting in the quarter future, which can maintain the sector rangebound.
This is a quote from the discussion that must be done with moneyconotrol.
Increase in the 75 BPS level by The Fed as anticipated by the market. Even after this Fed raising the real interest rate in us remains very negative. If US inflation which is around 9 percent remains sticky even at a slightly lower level, it may be difficult for Fed not to take more interest rates. Therefore it is difficult to estimate direct change in Fed’s attitude.
Do you hope that RBI changes Dovish in August policy review, especially after a decline in commodity prices? What type of tariff increase do you see?
Reserve Bank of India may continue to raise tariffs in August meetings. The price of commodity has cool down new -new, reducing inflationary pressure. However, it must be seen whether the price of commodities continues to remain docile so that inflation cools materially.
It is difficult to predict whether RBI will be more dovish just because of some reduced commodity prices. RBI will focus more on long -term inflation paths and more important inflation expectations in the economy.
The market has conducted a big leap after the FED policy meeting. Do you think the market has appreciated all negative things, including inflation and policy firmness, and marching to the previous highest with the belief that the worst seems to have ended now?
It is impossible to predict the market. Pasar Baru -new united because central banks around the world have moved firmly to curb inflation. It is still not very clear whether the current central bank’s actions are sufficient or interest rate increases will be needed to keep inflation structurally lower.
Economic growth throughout the world will slow down because of a higher level and some economy may be pushed into a recession. Therefore it is difficult to say if the worst is behind us in terms of market.
With market recovery, what themes must be at stake and why?
We have more medium to long views from the market. The current increase in rate will affect growth in the near future. No matter how long the long -term growth for India looks much better than most of the large economy.
We think that when India turns from $ 2,100 per capita to say $ 3,000 or $ 4,000 countries per capita for the next 3-5 years the additional expenditure pattern will see quantum changes.
Therefore the sectors that will work well for the next 3 to 5 years may be very different from what has been done well in the last 5 years.
Do you expect a big impact on Indian growth stories if there is a recession in the US and Europe in the future?
Recession in large and advanced markets such as the US and Europe will definitely have an impact on the Indian economy, especially such sectors that are closely related to growth in this economy. India, however, most remain an economy driven by domestic which must eliminate the impact of recession in the US and other countries.
Consumers and the Indian company sector are in good condition that must continue to encourage the economy together with various government infrastructure and reform programs.
Do you think this is the right time to start taking a position in the current IT room?
The US is the largest market for most IT companies. Therefore, a slowdown or recession in the US will have a direct adverse impact on most IT companies because most companies will limit their expenses including their expenses. Although the assessment has become more reasonable, there are risks related to income deductions in the upcoming quarter that can maintain the reach of this sector bound.
Therefore, we will remain careful in taking a position. Thus, we need to take a slightly long view in this sector and are prepared that many of this face risk becomes correction or even absolute correction in the medium term.
There are several companies that do different niches and jobs and therefore will be relatively less affected. These companies can continue to provide strong growth and provide good returns to shareholders if they are valued in an attractive manner.
