Would the call still be to create a domestic focused portfolio, say, the likes of defence, consumption, infra perhaps?
Punita Kumar Sinha: Yes, and I think financial as well. Especially with the rural economy picking up, there certain sectors of the financial sector that were focused more on the rural unsecured segment which have had seen a lot of negative news and pressure historically over the last year, that sector could start looking better. So, I would say some of the NBFCs could start looking better and that is where I would still say there is more room because the financial sector has started to perform, but over the last couple of years it has been underperformer.
I would focus still a little bit more on quality and defensives and FMCG with the better monsoon could see some pickup as well. Defence, of course, we need. Every country is spending more on defence and with what has happened geopolitically and the India-Pakistan situation, India clearly is going to invest more in the defence sector. And then capex by the government, I am not sure how much, I mean the GST collections have been good, etc, but I do not know how much more capex is going to come from the government, but private sector capex might pick up.It has been one ignored space and, of course, rightfully so, there have been concerns about how much US spending or client spending is going to be and whether it is going to continue to get business as robust as it was earlier. What is your take now because it has been a well ignored sector for many months now, whereas the market has charged up ahead. Do you think there is a chance that it could play catch up? And now with some negotiations with countries on the table, do you think it stands a chance and it is not going to be as bad perhaps?
Punita Kumar Sinha: I mean, I think it is still in a pause situation from the capex from the companies in the US that discretionary spend on it is still on pause because their own economic situation with tariffs and immigration and visas all of that is still unclear and therefore, it is not like they have opened the tap on the spend side which would be required for IT companies to start seeing bigger order books, that has not happened yet and that still remains a little bit uncertain.
But the valuations obviously are reflecting our pricing in this uncertainty. So, the IT sector is not expensive, but there is not a real catalyst at the moment. But I am sure at some point things will stabilise on the trade front, on the immigration front, on President Trump’s economic and tax bills, etc, and maybe that is the time there will be a catalyst for more spending to come forth for benefit of this sector.
The last time you suggested to have a portfolio which is more domestically focused, but now that since we have a clarity on where the trade talks are headed, other than that, especially some of the emerging markets are doing well, do you believe now it is the time to once again look out for some of the export related sectors, any take other than it, any take on pharma, chemicals, any sector which is more overseas exposed, do you believe it is time to look into some of those sectors?
Punita Kumar Sinha: No, not exactly because I still think that the domestic sector and the make in India sector has much more potential than make in India for export because while India is a beneficiary compared to the loss from China and some of the other emerging markets, Asian countries, I still think that we do not know how the trade talks with China and other countries would go and what impact that might have on the export sector and I do not think the India-US trade dialogue is fully baked in, there could be still more negotiation, so I would still focus on what we can control which is what is dependent on the domestic sector.
