Latest news with #RupenRajguru
Economic Times
04-07-2025
- Business
- Economic Times
India on a strong macro footing despite global chaos: Rupen Rajguru
Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads "So, from a global setup, while US earlier fears of recession does not seem to be coming true, but there is definitely going to be some slowdown and in a way from India perspective, what I believe, as I said, the stars are aligned and the earnings growth which witnessed a little bit of slowdown sometime in last third quarter or so, we believe is now going to pick up. So, what we believe that we are in a very good wicket as we speak," says Rupen Rajguru So, in the current context, I would say chaos is a feature and not the bug in the current context. Having said that, from an India perspective purely if I were to see, the macro really looks pretty good simply because A) if I were to look through the balance sheet of the government, also balance sheet of the banks, as well as corporates, all are in a very healthy state, and the issues which we were facing sometime middle of last year wherein the government spending was not coming through and RBI was a little bit tight on the regulatory side, both those issues are receding. And because of those two issues, we saw the earnings of the India Inc coming down. But what we saw from the fourth quarter and what we believe this year also it would continue, the earnings momentum will again restart in said that, the key concern which has been haunting not only Indian but the global markets is, how the global macros will shape up. And incrementally, what we are seeing that while there has been a lot of debate about the impact of, the first of all, the reciprocal tariff and in what form and shape it will be taking place, but one thing appears to be clear that the rate of growth specifically in the US market is definitely going to slow, the dollar is going to be weak, and probably some of the other parts of the world so be it Europe, be it some of the other emerging markets definitely are going to do from a global setup, while US earlier fears of recession does not seem to be coming true, but there is definitely going to be some slowdown and in a way from India perspective, what I believe, as I said, the stars are aligned and the earnings growth which witnessed a little bit of slowdown sometime in last third quarter or so, we believe is now going to pick up. So, what we believe that we are in a very good wicket as we as you are right, if you look market on a daily basis, there will always be some action somewhere. But from our perspective at a structural level, considering India as a structural story, we definitely like two-three broader bigger themes. So, BFSI being one of them because that is the best way to play the entire India growth story and if I were to just put it in a very simplistic way, the best way to play India is through BFSI, consumption, and through capex, so that is the best way to play the current context, what we have seen is that A) the way the RBI has completely gone, I would say, the bazooka which it has given in the latest credit policy through direct means like rate cut, CRR cut and OMOs and forex swaps in which they have infused massive amount of liquidity in the system and liquidity which was negative is now into surplus and indirect ways by way of lowering down the regulatory bar in some of those measures, which they had done tightening last year. The focus is clearly going to be in an environment with rate cuts and easy liquidity and lower inflation, NBFCs tend to do well and for that matter all the wholesale funded financiers also tend to do well. So, we like NBFC as a segment. Secondly, also in an environment where finally now we are seeing rates getting lower and banks also are cutting their fixed deposit rates, so some of the products on the insurance side, some of the savings product or the non-par products we believe will come back into another segment within the BFSI which we like are the insurance companies and there again what we are seeing if I were to look back for last three-four years, a lot of the insurance companies had seen a de-rating because the regulatory environment was also pretty tight out there, that we believe is changing and secondly, as I said some of the savings or the non-par products which are a very high margin product for the insurance companies that will come back into reckoning and we believe some of the players are in a good position to capitalise on with the earnings growth also coming back and the de-rating done and there is a possibility of re-rating, so insurance companies, we believe are better placed, so that is the other theme which we like.I would say, rural recovery, the rural economy is we believe is doing well and the rural consumption we believe will come back simply because now the inflation is lower, so for the first time after a long period of time the real wage growth rate in rural is monsoons are good. There is record production on the food side, so that should aid that. So, rural recovery is a good theme. So, some of the sectors related to that be it two wheelers, be it some of the retailers, and all we expect them to do the way the market is, frankly there are not many so-called dark horses. So, if I were to purely look at, if there are any contrarian bets, I would say some of the low-ticket consumption item which is again linked to the rural theme which I said, but those segments are completely beaten down by the some of the companies on the home improvement side, while the real estate cycle has been strong but the home improvement companies, stocks have struggled. So, some of the tile companies, pipe companies and all have not done that well and some of the low-ticket consumer discretionary items be it the footwear, luggage, all have not done that well, so that can be something which clearly can potentially be dark horse because while the earnings growth has not been there, but we believe there would be earnings growth and those stocks have done nothing for last couple of years or so, there can be some potential value emerging out there.
Time of India
04-07-2025
- Business
- Time of India
India on a strong macro footing despite global chaos: Rupen Rajguru
"So, from a global setup, while US earlier fears of recession does not seem to be coming true, but there is definitely going to be some slowdown and in a way from India perspective, what I believe, as I said, the stars are aligned and the earnings growth which witnessed a little bit of slowdown sometime in last third quarter or so, we believe is now going to pick up. So, what we believe that we are in a very good wicket as we speak," says Rupen Rajguru , Julius Baer . What are the macros on the table right now if one has to really understand from the global as well as domestic perspective? India-US trade deal optimism definitely is working in the market so far. We also have earnings season coming up. It is already there on the cards as well. But having said that, the crude prices and overall optimism which according to your analysis if you could just help us understand till how long will it remain and how are you reading the markets keeping all the macro factors in favour in India? Rupen Rajguru: So, in the current context, I would say chaos is a feature and not the bug in the current context. Having said that, from an India perspective purely if I were to see, the macro really looks pretty good simply because A) if I were to look through the balance sheet of the government, also balance sheet of the banks, as well as corporates, all are in a very healthy state, and the issues which we were facing sometime middle of last year wherein the government spending was not coming through and RBI was a little bit tight on the regulatory side, both those issues are receding. And because of those two issues, we saw the earnings of the India Inc coming down. But what we saw from the fourth quarter and what we believe this year also it would continue, the earnings momentum will again restart in India. Having said that, the key concern which has been haunting not only Indian but the global markets is, how the global macros will shape up. And incrementally, what we are seeing that while there has been a lot of debate about the impact of, the first of all, the reciprocal tariff and in what form and shape it will be taking place, but one thing appears to be clear that the rate of growth specifically in the US market is definitely going to slow, the dollar is going to be weak, and probably some of the other parts of the world so be it Europe, be it some of the other emerging markets definitely are going to do better. So, from a global setup, while US earlier fears of recession does not seem to be coming true, but there is definitely going to be some slowdown and in a way from India perspective, what I believe, as I said, the stars are aligned and the earnings growth which witnessed a little bit of slowdown sometime in last third quarter or so, we believe is now going to pick up. So, what we believe that we are in a very good wicket as we speak. Live Events Moving to the sectoral approaches, we see a lot of sectoral churning. A day comes when the banks are doing really good. Then, we have metals shining and this sectoral churning is up and here to stay. What are the sectoral approaches and which sectors do you feel are doing good these days? Rupen Rajguru: So, as you are right, if you look market on a daily basis, there will always be some action somewhere. But from our perspective at a structural level, considering India as a structural story, we definitely like two-three broader bigger themes. So, BFSI being one of them because that is the best way to play the entire India growth story and if I were to just put it in a very simplistic way, the best way to play India is through BFSI, consumption, and through capex, so that is the best way to play India. In the current context, what we have seen is that A) the way the RBI has completely gone, I would say, the bazooka which it has given in the latest credit policy through direct means like rate cut, CRR cut and OMOs and forex swaps in which they have infused massive amount of liquidity in the system and liquidity which was negative is now into surplus and indirect ways by way of lowering down the regulatory bar in some of those measures, which they had done tightening last year. The focus is clearly going to be growth. So, in an environment with rate cuts and easy liquidity and lower inflation, NBFCs tend to do well and for that matter all the wholesale funded financiers also tend to do well. So, we like NBFC as a segment. Secondly, also in an environment where finally now we are seeing rates getting lower and banks also are cutting their fixed deposit rates, so some of the products on the insurance side, some of the savings product or the non-par products we believe will come back into reckoning. So, another segment within the BFSI which we like are the insurance companies and there again what we are seeing if I were to look back for last three-four years, a lot of the insurance companies had seen a de-rating because the regulatory environment was also pretty tight out there, that we believe is changing and secondly, as I said some of the savings or the non-par products which are a very high margin product for the insurance companies that will come back into reckoning and we believe some of the players are in a good position to capitalise on that. So, with the earnings growth also coming back and the de-rating done and there is a possibility of re-rating, so insurance companies, we believe are better placed, so that is the other theme which we like. I would say, rural recovery, the rural economy is we believe is doing well and the rural consumption we believe will come back simply because now the inflation is lower, so for the first time after a long period of time the real wage growth rate in rural is positive. The monsoons are good. There is record production on the food side, so that should aid that. So, rural recovery is a good theme. So, some of the sectors related to that be it two wheelers, be it some of the retailers, and all we expect them to do well. I just want to know any particular theme or story which could be a dark horse, which is there on your radar so far. No calls taken on those lines yet, but definitely you are tracking it down for further strategies. Rupen Rajguru: Look, the way the market is, frankly there are not many so-called dark horses. So, if I were to purely look at, if there are any contrarian bets, I would say some of the low-ticket consumption item which is again linked to the rural theme which I said, but those segments are completely beaten down by the market. So, some of the companies on the home improvement side, while the real estate cycle has been strong but the home improvement companies, stocks have struggled. So, some of the tile companies, pipe companies and all have not done that well and some of the low-ticket consumer discretionary items also. So, be it the footwear, luggage, all have not done that well, so that can be something which clearly can potentially be dark horse because while the earnings growth has not been there, but we believe there would be earnings growth and those stocks have done nothing for last couple of years or so, there can be some potential value emerging out there.
Economic Times
02-05-2025
- Business
- Economic Times
Will the party continue in the Indian market? Arvind Sanger answers
Live Events You Might Also Like: US dollar declining, global markets decoupling from the US market: Rupen Rajguru (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel , Founder,says India is poised to finalize a trade deal with the US swiftly, potentially being the first. While recent March quarter figures weren't outstanding, improvements in incremental data could make India's FY26 growth narrative compelling. Despite near-term global trade war concerns, non-consensus moves in gold, US markets, or the dollar are possible, potentially impacting emerging markets and other outperforming regions like Europe and things that went well for India in the trade war. India was seen as a winner. Secondly, the US dollar was weakening and investors were looking to diversify away from the US. Those were some very powerful trends that India benefited from. Now, if the US starts to sign deals with a number of countries and the market starts to stabilise, then maybe even the dollar starts to stabilise and the big kahuna is what is going to happen with China. Clearly, the signals from the Trump administration are very clear. The US wants to do a deal with China and China has been playing a little bit of a tough game as they are trying to get a favourable positioning pre-talks to be able to do a if May is the month where some kind of a China deal is struck with significant reduction in tariffs – even if they end up at 50% or whatever – then we could see at the margin both the dollar stabilise and maybe China benefit a little more. So, very short term, it could cause some money to flow in those two directionally, it is looking like India is going to get a deal done very quickly. It may even be the first one. That is nice, but that is not the real story. The real story is what is going on with the India growth story. Obviously, the March quarter numbers have not been stellar. But if we see incremental data at the margin starting to improve, then the India growth story for FY26 starts to look interesting and that is really going to be the determinant beyond the very near-term noise of global trade war as to how the Indian market it has become a bit of a consensus trade. I do not know if it will last the anti-consensus trade, or whether that will last for a whole quarter, but it certainly could last for a month. It is often said that the maximum pain markets move in opposite directions to inflict pain and if the consensus is so widely in one direction, then it is quite likely that you could get a non-consensus move, a non-consensus selloff in gold, or a non-consensus rally in US markets, maybe even a non-consensus rally in these are very short-term trends, but it would not surprise me that what has happened in the last few days in the US market continues for a bit and that does take some of the bloom off the emerging markets' frenzy and frankly even Europe and Japan have outperformed. So, we could see a bit of a non-consensus trade happen for a few weeks, but fundamentally long term it may be a different story. Near term, who knows? Your call is quite interesting that we could get a non-consensus move in US have to step back a little bit and look at the length of these cycles. From the beginning of '99 through the end of 2007, Nifty was up like over 500%. The US market was up 50%. So, this is not new that you get this massive cycle. Look back at the data for that eight or nine years for the Indian market and the Chinese market did even better. So, EMs had a huge run in that period and the US market did nothing and it was not like the US economy was in the toilet or anything like that. These cycles went on for a long time and then in 2009, the US had the financial crisis. The US financial system had almost gone bankrupt and after eight or nine years of huge underperformance by the US, who would have said that for the next 15 years the US market would beat every other market in the world?So, these cycles last for a long time. But within those cycles, it is not a straight line. You will have months and quarters where you get counter cyclical moves. If you ask me to tell you whether the counter cyclical move would be short term or medium to long term, I would say medium to long term. I do not know if India will be the big winner or some other emerging market will be the big winner. When the US market moved up by the end of last year, 50% of the world's market cap was in the US market. That was the peak that we came last in 2000 and at the end of 2024. These cycles tend to have long legs for a long period of time and India and other emerging markets that do well in terms of economic performance are poised to benefit from funds flow redirecting to a more normal long-term cycle because these cycles turn and then they go for a long time.
Time of India
01-05-2025
- Business
- Time of India
US dollar declining, global markets decoupling from the US market: Rupen Rajguru
Rupen Rajguru , MD & Senior Advisor, Julius Baer , suggests a weakening US dollar and a shift towards bilateral trade are reshaping global markets. US exceptionalism drove significant equity flows into the US, but this trend is changing. Emerging markets like Europe, Brazil, and India are benefiting from a decoupling driven by liquidity, signaling a potential end to US technology's dominance due to recent policy shifts. Help us make sense of the kind of global moves that we are seeing in the US market. I have read the note that you have come out with and you also talked about global markets decoupling from the US. What impact could it have on global markets in terms of emerging markets and also on our markets back home. Rupen Rajguru: As you rightly said, after the initial knee-jerk reaction, the global market seems to have decoupled from the US market and the reason is the way the entire tariff tantrum has come through. Not only that, but the way every day, new stances have been taken with the US president taking on various subjects. So two things are very clear. One, at least the US dollar is on its way down and that is getting reflected in the DXY as well. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Moose Approaches Girl At Bus Stop In Cagayan - Watch What Happens Happy in Shape Undo Secondly, there seems to be a new world order, wherein earlier it was a multilateral free trade world and now it is going to be more of a bilateral trade and the world will be slightly different than what it was earlier. In that event, what is happening is that thanks to the US exceptionalism for the last four years, on an average 80% of the overall flows into equities went into the US. But because of this new structure, probably a lot of the flows will get into some of the other countries including Europe, some of the other Asian countries, India included. In that context, all the global markets, Europe this year has done pretty well, Brazil has done well, India also on a relative basis has done well. So there is a decoupling of the market thanks to the liquidity we are seeing and that structure is here to stay. For the last 15 years, the US market and especially US technology stocks have done exceedingly well. We believe that momentum is broken thanks to the way Donald Trump has acted in the last two-three months and purely from a capital market and liquidity perspective, it should be better for other countries including India. While for the last two days, we are seeing a bit of a trepidation in the market because of the geopolitical tensions with Pakistan, India otherwise is better placed because the FIIs have turned net buyers. The flows have started coming back to India, The dollar index has cooled off and so has the bond. As far as the US is concerned, the flows might reverse and it could come back to emerging markets, especially India. Are we better placed now? Once the trepidation in the market is over, do you see the markets moving up again? Rupen Rajguru: What you said is true, but from a market perspective, liquidity is an important factor that will determine the short-term movement of the market. We have seen in the last two-three weeks, thanks to liquidity, the market is going up. But purely from an India perspective, India was going through a macro headwind. Live Events You Might Also Like: India in reasonably good spot; retail investors should stay invested for long: Sebi chairman If you were to say FY25 probably will land up with Nifty earnings growth of 2-3%, we all know the reasons – starting from government spending, thanks to elections and other reasons, was not very high for the first seven-eight months. From a regulatory standpoint, as also from a liquidity standpoint, it was pretty tight and also the other factors of inflation being high, all that impacted the growth for the economy. All those factors are now reversing. The Indian market corrected because of more domestic headwinds and now the global headwind has come through and hence the volatility that we have seen. Going ahead, we believe the domestic headwind will recede and all those factors – be it government spending or RBI focusing on growth and being very easy both on the liquidity side and also on the regulation side, are helping. Their focus is to get back growth as inflation has come off. So, earnings-wise, probably we will now see the earnings growth reviving, but at the same time, we have to be mindful of valuations. Apart from liquidity and sentiment, the third leg is valuations and on valuations, after the current rally at 24,300 and thereabouts, we are at a fair valuation zone. Can we go to 25,000-25,500? Probably yes, but for that, earnings growth should come through which probably will start kicking in from the second quarter of the next financial year. So, to answer your question, unless and until global things do not deteriorate significantly, the war and all those scenarios will have a volatility in the market. But from an upside perspective, we do not see a big upside from here. But if there is a draw down because of geopolitical issues, this would be the market to be bought into. Large private banks have largely been leading the rally right now. Are you seeing some rotation into midsize banking names? Do you believe that the sector churn could happen in that direction now and from the financials pack would you prefer banking over NBFCs given the numbers we have seen recently from the Bajaj twins which was rather disappointing? What is your pecking order within the financial space? Are the valuations justified for bank stocks? Rupen Rajguru: Banking has been the star for last two quarters and we have been positive on banking and large private sector banks which has actually played out. So, after the rally in some of the top three, top four private sector banks, valuation-wise, were in a zone in which they were much below their long-term average and now some of these banks are getting towards their long-term average and some are actually higher than their long-term average as we speak. You Might Also Like: How will US-China trade tensions impact global corporate capex & Asia's GDP growth? Chetan Ahya answers Now we have to look through from a sector perspective. Banking as a sector did pretty well in that environment of tight regulation and tight liquidity and now that environment is changing so the growth will come back. Typically, after the leaders move in markets, time comes for the mid and the second tier banks. In that space, we like some of the other banks and that would also include some of the NBFCs where there has been changes in management. Some of the smaller banks have CEOs who were KMPs of some of the large banks. Some of those guys are now doing a lot of changes in the banks and the structures in which they operate. We are pretty excited about that. So, we are evaluating not all, but some of the banks wherein we are seeing change in guard and strategy. We like those banks. We believe growth would definitely be higher on the NBFC side. You mentioned the Bajaj twins, I think numbers were broadly in line and nothing unusual about those numbers and in an environment of a lower interest rates, probably NBFCs are better placed because a lot of their loan books are fixed and we are more constructive on NBFCs vis-à-vis some of those banks. You Might Also Like: US GDP contraction to have limited impact on global economy; market may dip below Apr 7 low: Jai Bala
