
India to benefit from global manufacturing shift as China+1 strategy gains momentum: Ankur Jhaveri
(You can now subscribe to our
(You can now subscribe to our ETMarkets WhatsApp channel
In this edition of ETMarkets Smart Talk, Ankur Jhaveri , MD & CEO of JM Financial Institutional Securities Ltd., highlights how India stands to benefit from the evolving global manufacturing landscape, driven by the China+1 strategy.As global companies look to diversify supply chains away from China, Jhaveri believes this structural shift presents a multi-year opportunity for India.He also shares insights on key macro risks, sectoral valuations, policy expectations, and why rural consumption and domestic manufacturing are likely to be the twin growth engines in the coming quarters. Edited Excerpts –A) There has been a series of events in June that got investors glued on to emerging geopolitical dynamics. June has certainly been more nervous compared to May and immediate investment strategies seems to be rather defensive.Having said that it's not only geopolitical situation but also an expression of recent earning season that has impacted market volatility. Corporate commentary by large has been cautions, which has forced investors to re-calibrate their earning projects and multiples.A) Global environment continues to remain fluid since the change of US President. Tariffs, Monetary policy reaction, and geopolitical conflicts are driving market sentiments currently.Going forward unfolding geopolitical events and finalisation of trade deals would be the key monitorable events from the market standpoint.Any policy flip flops or further postponement of the tariff deadline would be negative for the US Dollar and hence should attract flows towards Emerging Markets.A) Global manufacturing is undergoing a shift, and the recent policy actions be it fiscal or monetary are all targeted towards benefiting the domestic manufacturing ecosystem.Global players have been diversifying their manufacturing capacities away from China, although other countries would also benefit from this shift, India too stands to gain. This is a multiyear theme and companies in the manufacturing supply chain will be the beneficiaries.Secondly, in the immediate near term we see that the conditions are aligned in favour of consumption. Easy monetary policy, Favourable weather conditions - onset of La-Nina condition and Fiscal measures like recent Tax exemption would all improve consumption demand in the domestic economy - especially rural.A) Geopolitical conflicts seem to be broadening with every passing day, its impact on crude oil depends on the incremental steps taken by these countries in conflict.To be specific, the entry of US in the Iran-Israel conflict complicates the issue further, the extent of retaliation by Iran will have serious implications on Crude oil price. Brent crude price is already up 22.9% in June, Iran's decision to block the Strait of Hormuz would further fuel the rally.Oil imports form one fourth of India's total imports and out of 5.5 Mn Barrels per day (bpd) imports of crude oil currently, 2 Mn bpd is sourced through the Strait of Hormuz.However, its impact could be cushioned meaningfully if crude oil imports are diversified from Russia, which does not use this corridor to supply oil. We believe that proactive monetary and fiscal policies should support growth in the current fiscal, hence 6.5% growth seems achievable which should reflect in corporate earnings as well.A) Banks provide margin of safety on the valuation front, while other sectors appear to be fully priced or trade above the historical averages.However, valuation should not be the only criteria in an investment decision, considering the global uncertainty in which these businesses are functioning.We believe bottom up approach would be suitable in current macro environment, companies with decent earnings visibility trading at reasonable valuation would be preferred.A)It is worth highlighting that the comfortable inflation trajectory has allowed the global central banks to ease policy rates. However, it is the tariffs and the related disruption which would decide the inflation path going forward, especially in the US.A) The domestic inflation trajectory is expected to remain comfortable in the near term, which would allow the RBI to focus on growth, the governor indicated that the central bank is targeting a potential growth rate of 8%.Moreover, Governor Malhotra recently hinted that if the inflation outlook turns out to be below RBI's projection, it will open up more room for policy easing.This according to us is preparing the markets for more policy easing, however at this juncture we believe that the space for incremental policy easing if any would be restricted to 25bps.On the recent front-loading of rate cuts, we believe that RBI intended to deliver a positive shock to the economy which would eventually fasten the rate transmission, the advance announcement of the CRR cut was to cushion the Banking NIMs to some extent.We believe that a pickup in consumption is imminent once global shock settles and impact would be visible with a lag of a quarter or two.(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


Economic Times
2 hours ago
- Economic Times
Jain Irrigation net profit declines 8.5% to Rs 11.19 crore in Jun quarter
Jain Irrigation Systems on Saturday reported an 8.5 per cent fall in consolidated net profit to Rs 11.19 crore for the latest quarter ended June 2025. ADVERTISEMENT Its net profit stood at Rs 12.23 crore in the year-ago period. The total income rose to Rs 1,547.68 crore in the April-June period of 2025-26 from Rs 1,479.24 crore in the corresponding period of the preceding year, according to a regulatory filing. Jain Irrigation Systems Vice Chairman and Managing Director Anil Jain said, "In Q1 of FY26, the company experienced good demand for Micro Irrigation Systems, Tissue Culture, Exports and Solar Agri Pumps. We saw good growth in revenue and margins in Hi-Tech Agri division".Due to the early monsoon in May, he said the company saw an impact on demand for pipe."Margins for pipe business were also under pressure due to lack of demand," Jain said. ADVERTISEMENT He said the company's focus towards retail and exports has shown better results in terms of revenue growth and margins."With well-spread monsoon and the government's commitment to investment in infrastructure, we expect revival of demand for piping business in H2FY26," Jain said. ADVERTISEMENT In 2024-25, the Maharashtra-based Jain Irrigation Systems had posted a net profit of Rs 25.69 crore on a total income of Rs 5,793.24 crore. The company is engaged in the manufacturing of micro irrigation systems, PVC P pipes, HDPE pipes, plastic sheets, agro-processed products, renewable energy solutions, tissue culture plants, financial services and other agricultural inputs. PTI (You can now subscribe to our ETMarkets WhatsApp channel)


Economic Times
2 hours ago
- Economic Times
IDFC First Bank Q1 results: PAT declines 32% YoY, NII rises by 5.5%
IDFC First Bank has reported a 32% YoY decline in its profit after tax (PAT) at Rs 463 crore in the first quarter of the financial year 2026, while the net interest income (NII) witnessed a growth of 5.1% YoY to Rs 4,933 crore in the same period. ADVERTISEMENT The NII is comparable to Rs 4,695 crore in the first quarter of the last financial year. However, on a quarter-on-quarter basis, the PAT grew 52.1%. The bank's Net Interest Margin (NIM) on AUM dropped by 24 basis points quarter-on-quarter, falling from 5.95% in Q4 FY25 to 5.71% in Q1 FY26. This decline was mainly due to the impact of repo rate changes, a shift in the asset mix, including a sharp fall in the microfinance segment, and lower investment yields. Operating profit (excluding trading gains) declined by 6.2% YoY, from Rs 1,858 crore in Q1 FY25 to Rs 1,744 crore in Q1 FY26. However, on a sequential basis, it rose by 7.8%. (You can now subscribe to our ETMarkets WhatsApp channel)


Economic Times
2 hours ago
- Economic Times
NephroPlus files DRHP with Sebi, to raise Rs 353 crore via fresh issue
(What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Sensex Today. Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price