IT sector not broken, but evolving, says TRUST MF's CIO Mihir Vohra; shares top sectoral bets
The Nifty has been churning in a tight band for several weeks. The domestic and global macroeconomic and geopolitical setup has many moving parts, and markets are probably waiting for a reduction in uncertainty. Globally, US trade negotiations are still on, and the US Dollar continues to be weak in spite of high bond yields.
Domestically, the long-term macro parameters are healthy – low inflation, improving current account deficit and fiscal deficit. Consumption indicators are a mixed bag, and credit growth has not yet picked up in spite of ample liquidity and rate cuts. In the short term, the earnings season has seen a mix of negative and positive surprises. Sustained earnings growth remains key for the market. If global volatility subsides and investor focus returns to domestic earnings, that could be enough to lift sentiment. Clarity on a U.S.–India trade agreement by the August 1 deadline can also be a catalyst.
Foreign portfolio investors have turned cautious again — derivative positioning suggests the most bearish sentiment in months. That may continue until we get clear signals on U.S. Fed policy or trade developments. In the medium to long-term, if the US Dollar continues to remain relatively weak, we should see sustained flows to countries like India. We see FPI selling as cyclical rather than structural. In time, India's superior long-term macro, demographics and higher growth should bring global interest back.
India also has a strong internal support system: domestic institutions remain net buyers, and record retail SIP flows continue to underpin demand.
Overall, we have an underweight stance in the IT sector. We are tackling the sector exposure selectively, preferring midcap IT names and digital infra providers with stronger growth visibility, rather than overcrowded large caps. Even within the blue-chips, firms executing well on AI/automation and client-based cost takeout remain interesting. The sector isn't broken — it's just evolving. While the leading IT giants delivered subdued numbers — flat revenues, soft global deal wins — valuations are now trading closer to historical norms than early 2024 extremes.
Our growth conviction remains highest in capex, power transmission, infrastructure logistics, and defence suppliers—segments with visible order books, operating leverage, and a longer runway of growth. However, we are selective as these segments have become quite popular and valuations are not uniformly attractive.
Financials offer opportunities in NBFCs and banks, with expectations of improving credit growth and asset quality. Auto ancillaries and engineering services/export plays are also showing promise as the global capex cycle recovers. In healthcare, the stories are more stock-specific, and we like the CDMO space and hospitals.
After sharp rallies in many names, investors have started booking profits. The pullback is a natural consolidation, not a capitulation. The long-term fundamentals — rising defence budgets, dual-use platform opportunities, and improving export arcs — remain intact.
Stock selection is critical now. We favour robust balance sheets, clear execution histories, and firms with pipeline visibility.
Yes, we launched our third equity fund, the Multicap Fund. This continues our efforts to offer funds in all the core categories to our investors and distributors, the first two being the Flexi Cap and Small Cap funds. The Multicap category is a core category and is suitable for most investors who want a diversified exposure to the stock market.
Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
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The Hindu
29 minutes ago
- The Hindu
Sell only Swadeshi goods, PM Modi exhorts Indian traders amid ‘global economic uncertainty'
Asserting that India is on the path to becoming the world's third-largest economy, Prime Minister Narendra Modi said on Saturday that the country must remain alert to its own economic priorities amid the instability and uncertainty facing the world economy. PM Modi's remarks came just days after U.S. President Donald Trump called India a "dead economy" after announcing a 25% tariff on the import of Indian goods along with an unspecified "penalty" for buying Russian military equipment and crude oil. Addressing a public meeting in his parliamentary constituency Varanasi on Saturday (August 2, 2025), Mr. Modi said, "As we talk about economic progress, I want to draw your attention to the current global scenario. "The world economy is facing instability and uncertainty. In such times, countries are focusing solely on their own interests. India, too, is on the path to becoming the world's third-largest economy and must remain alert to its own economic priorities." The prime minister also made a renewed push for 'Swadeshi', stressing that every party, leader and citizen must work to promote indigenous goods if "we want India to become the third-largest economy". 'Sell only Swadeshi goods' Making a special appeal to traders and shopkeepers, the prime minister said, "At a time when the world is going through uncertainty, let us take a pledge to sell only Swadeshi goods from our shops and markets. Promoting made in India goods will be the truest service to the country." He also urged people to be conscious consumers, saying, "Whatever we buy, we should ask ourselves — has an Indian toiled to make this? If it has been made by the sweat of our people, with their skills, that product is Swadeshi for us. We must adopt the mantra of 'Vocal for Local'." "The feeling of Swadeshi in every action will define our future. This will also be a true tribute to Mahatma Gandhi. Only through collective effort can we fulfil the dream of a developed India," Mr. Modi said. The prime minister, who was addressing a massive public gathering on Saturday in Banauli village, highlighted the government's farmer-centric policies in detail. He said the government is constantly working for the well-being of farmers. Calling for a national movement to support local products, the prime minister said, "This is not just about Modi saying it, every Indian should say this — if we want India to become the third-largest economy, every political party and every leader, keeping aside their hesitations, must work in the nation's interest and awaken the spirit of Swadeshi among the people." Demands made by U.S. The U.S. tariff action is being seen as a pressure tactic to get New Delhi to agree to demands made by the U.S., which has, in recent days, got favourable trade deals with major partners like Japan, the UK and the European Union. India has especially toughened its stance on extending duty concessions on agri products, dairy and GM foods in the proposed bilateral trade agreement (BTA) with the U.S. With the U.S. not able to finalise a deal with India so far, Mr. Trump on Thursday announced the imposition of an additional 25% import duty on Indian goods entering American markets from August 7. Earlier, this duty was to be imposed from August 1. The President has also not specified the penalty that he announced against India for buying crude oil and military equipment from Russia. 'Fastest growing major economy' In the backdrop of Mr. Trump's "dead economy" barb at India, Commerce Minister Piyush Goyal had told Parliament on Thursday that India is the world's fastest-growing major economy and widely expected to be the "third largest economy" in a few years. Mr. Goyal also said India will take all necessary steps to safeguard and promote national interest and that the implications of the US tariffs are being examined. In a post on Truth Social, Mr. Trump had said, "I don't care what India does with Russia. They can take their dead economies down together, for all I care. "We have done very little business with India, their Tariffs are too high, among the highest in the World." His remarks were echoed by Congress leader Rahul Gandhi who said President Trump has stated a "fact", prompting a strong condemnation from the BJP. While announcing the tariff, Trump described India's trade policies as "most strenuous and obnoxious".
Indian Express
an hour ago
- Indian Express
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But the gap between India's negotiating brief and Trump's maximalist agenda proved too wide to bridge. Trump's growing impatience was evident in a barrage of tweets targeting India, while senior administration figures—Treasury Secretary Scott Bessent and Senator Marco Rubio—spoke publicly about the President's 'frustration' with Delhi's posture. Frustration had also defined Trump's first-term trade engagement with India. Robert Lighthizer, Trump's former US Trade Representative, recounts in his book, No Trade is Free, how difficult it was to conclude even a modest trade agreement with Delhi. He placed the blame not on India's bureaucracy, but on the entrenched interests of the Indian capitalists that fiercely guard the barriers protecting them from external competition. Lighthizer revealed he kept files on top Indian tycoons—whom he labeled 'oligarchs'—to better understand Delhi's negotiating strategy. Trump's complaint about India's 'obnoxious' non-tariff barriers rings familiar. 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He proposed replacing blanket multilateralism with 'strategic pluralism,' forging separate deals with different nations based on US leverage. Before taking over at the Treasury, Bessent, too, hinted at the broader potential of tariffs—not just to reshape trade, but to pressure states on energy, currency, and strategic alignment. For Bessent, Trump's strategy was about a grand rebalancing of the global economy in America's favour. Trump has not held back. He has used tariffs for a variety of objectives. He imposed a 50% tariff on Brazil to weaken President Lula and help his rival Jair Bolsonaro. He is threatening tariffs on Indian and Chinese oil imports from Russia and using economic leverage to push BRICS countries away from their loose talk on de-dollarisation. 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