Understanding Auto, IT, Pharma & GST Impact | Domestic Liquidity Supports Range-Bound Market - video Dailymotion

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00:00the market also or not because hi good morning good to have you in the show and because let's

00:04start off with that one bright pocket today because the festive season season at least

00:09going by both uh you know hyundai and maruti's commentary fingers crossed seems like it's off

00:15to a good start absolutely i think automobiles uh being uh you know both beneficiary of gst rate

00:23cut interest rate cut and also in general with a low base effect uh you know has to be you know

00:29one of the biggest beneficiary and uh and i think that there's not too much competition

00:34that consolidated players so players who have good models lined up uh to capture the festive season

00:40and this this right timing are benefiting so i think automobiles we've been quite positive

00:44that's it because uh from an investment perspective are you recommending adding any of the other gst

00:53beneficiaries white goods staples etc uh anything else within the consumption pool which is looking

01:00good after the gst rationalization we keep looking for ideas there's no doubt on that i think consumer

01:07i still find uh you know you have to play on the valuations uh comfort we don't have much valuation

01:13comfort i mean how do you buy a consumer durable player who also might be beneficiary of interest

01:18rate but you know which are available at 60p 70p uh and yet hope to make money whereas i don't see

01:24any difference between uh the structure of the sector whether it is consumer durable automobiles so i

01:29would rather play that for automobiles than consumer durable uh just because of the risk reward uh you

01:35know if you see very interesting similarities in both sectors consumer durables also have each of the

01:39product category of c4 players and you know the same thing you will find in automobiles uh very much

01:45same beneficial the same cycle of under penetration or interest rate cut or you know

01:51rising per capita income so i find that this is far better risk reward than than consumer durables

01:58okay vikas hi morning um want to get your sense on the entire it pack because the last time we

02:04interacted you did say that you were expecting to see early teen returns from large cap it and now with

02:10this entire h1b news coming in from the u.s where do you think this number could head

02:14i think so see i think with the post clarification h1b is only incremental so to that extent i don't

02:22think it's very very significantly negative any news see if you see in last many years a lot of

02:26off-flowing has gone up it companies have hired a lot of local people in the u.s so it's not very

02:32dependent tomorrow let's say even if these companies have to bear the increase cost of visa the margins

02:37could be to that extent initially 20 30 40 basis point but more importantly they will pass on to

02:42customers so i think these are the things which you know initially were in my opinion thankfully

02:46it's not on the existing pool of the visa holder so to that extent i'd say it's quite immune and

02:51anyway incremental growth was not necessarily coming from from you know people going there but also

02:57more from offshoring and you know using ai tools and visitation so i think in that sense i don't find it

03:02big very very big uh negative for and that's the reason you will see you know it sector has not

03:07responded in a file of all unsignificant here you know uh uh so i we have work i think for us

03:13does not change anything significant uh the the drivers of the it sector continues to remain same as

03:19they were before because you think the derivative that is the gccs although the listed opportunity may

03:26be quite small right now in india markets you think that could be the big trend to follow on to

03:32yes gcc has been a big trend irrespective of what has happened on hashman feature visa

03:38uh if you see in every year we are having 100 gccs coming about if you go to athrabad pune and

03:43bangalore and even in now smaller cities like indore and all you know you are beginning to see

03:48uh global capability centers getting big uh so that trend has been irrespectively you know on on on rise

03:55and uh i see no reason that kind of slowing down uh uh yeah of course you rightly you can't rightly

04:01said you can't play directly you have to play on the derivatives of that but yeah but at the same

04:05time from a job creation perspective that that continues to be one of the very big uh you know

04:11opportunity uh for india and it's not only necessarily in the it sector it is even the

04:16manufacturing companies are setting up the gccs and so it's it's quite widespread because other than

04:23that if i just look at the index we've done nothing really and just been beating around in

04:28a very very uh you know tight range if you can call it that for many months now what why is there so

04:35much push and pull in the market we last year we had a great run in the market we had a great run in

04:42the market for last many years and you know to some extent i think valuation was stressed last year

04:47which was followed by a little bit of earning slow down led by you know liquidity squeeze and

04:52government spending reduction which both got corrected in in in in this year our interstates

04:58came down liquidity got addressed government spending with gst cut has come income tax tax cut

05:03has come so there are lots of positives which are there you know from economic perspective there's

05:08nothing macro levels uh you know disturbing at the country level now when valuations were slightly

05:14you know elevated i think you you had a time correction which itself creates the valuation as

05:18well so we have seen excesses got corrected in last you know 12 months we have seen uh you know stocks

05:24which which which were under when you have done well so this is a typical readjustment cycle of any

05:28market after selling such a large rally uh so in my opinion uh in a good news is that market did not

05:34fall despite all the worries uh as much as uh you know of all the count including you know we had uh you

05:40operation sindhu we had tariffs none of them impacted mark india in the market significantly negatively

05:47and that shows the kind of resilience we have that shows the kind of macro stability we have

05:51in an indian market so this kind of consolidation are always very healthy for the markets and they

05:57would they have happened in the past as well and they will continue to happen in the past

06:00markets never go up linearly you know so hence i never get worried when markets don't do well

06:06anything in six months or uh for a you know it's a period of time as long as there's nothing

06:11changing fundamentally oh yeah absolutely and it's the retail money and the domestic liquidity which

06:17has also held the market up and that really speaks a lot for itself at the time when fris have just not

06:24been buying india but other than that because you know just wanted to understand while the real impact

06:29of uh the gst cuts is only going to come in a quarter after uh earnings the one reason because

06:37of which the market got into this you know range bound movement um what is it that you are anticipating

06:44from the quarter which is coming up now i think you know this quarter probably people will be quite

06:50understanding markets are always forward i think this quarter even if you have some sort of disappointment

06:54because of this pushed sales on or delayed sales because after announcement i think uh the sales

07:00kind of halted or it slowed down not halted uh so that might have some impact though i guess the 10

07:05days it has the 10 days period to cover it also uh so i would not be as pessimist so i don't see

07:10major disappointments coming into the earning but even if that were to happen i don't think markets

07:15would be kind of market would be ignoring that it is always you know seeing forward and market would

07:20say that probably that sales would get spilled over to the next quarter uh because just wanted to have

07:26your take on pharma as well because we do believe that you are positive on the pharma space overall but

07:31just like it because uh this whole h1b visa thing came in as a surprise and for pharma space as well we

07:39keep hearing from donald trump saying that he is looking forward to lower the prices and in the latest he's

07:45also talking about the olympic prices to be slashed further uh what's your current take on the pharma

07:52space as an investor how should one play the theme probably it's slightly misunderstood concept when

07:59you say that thing you know when he's saying you want to bring down prices down that is more for

08:03innovative drugs and you know most of the indian companies are doing only the generic drugs right so

08:08and they are anyway uh far far cheaper than anything else they can manufacture in the u.s and india

08:14accounts are almost close to 40 45 percent of the market share in u.s medicines in generic space

08:19so and it's not that indian pharma companies are making some obscene margin from the you know selling

08:24in generic space in in u.s so even if they were to sort of tomorrow and the fact that they've excluded

08:29uh pharma clearly shows that they know that there's no much scope for that and it can have an impact on

08:35their healthcare system or you know overall uh uh you know availability of medicines in u.s hence

08:41they've excluded that and even if it were to come i am sure you know indian pharma companies will pass

08:46on uh that to that i think regarding tariff i was only one say that people think that's a tax on

08:52india it's not a tax on india it's actually a tax on you know u.s consumer none of the you know

08:56whether it is pharma any other sector you know make more than 15 20 percent margin so if they were

09:01to pass on entire margin still u.s and consumer will have to bear those uh extra tariffs so you know

09:06uh i'm sure they will have to keep in mind the sensitivity of their own sector and hence i don't

09:12think pharma would be uh in my opinion covered if at all they do it it will be bad for their

09:16consumer uh they might be temporarily uh some sort of uh impact here but uh i'm sure it will get over

09:24okay so that's the take coming in on pharma an interesting point there you make about tariffs

09:29being a problem for the u.s consumer more than it being a problem for the world but because thanks

09:33once again for joining us and great speaking with you this morning thank you very much okay let's

09:38take it across to the 10th annual jp morgan conference wherein my colleague sajit is

Understanding Auto, IT, Pharma & GST Impact | Domestic Liquidity Supports Range-Bound Market

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