Auto sector revival hinges on rural growth and inflation easing in 2025: Sandip Sabharwal

«2025, the key is that what sort of revival we see in the auto sector. This year has been very turbulent, like initially there were good demand trend, then inventory got built up, festival season was fine, but post festival season again the growth concerns are there. The inflationary concerns in the minds of the consumers has held back consumption across various sectors and on top of that liquidity and interest rates have been higher,» says Sandip Sabharwal, asksandipsabharwal.com.

We were just chatting yesterday about Asian Paints and how you think actually maybe it could bottom out in the year ahead. But that is not the case. I can even see names like IndusInd Bank, Nestle, Tata Consumer. We know your thoughts on FMCG, but what about banks? Do you think that the underperformers, like a case in point being IndusInd Bank, Bandhan, etc, even IDFC, and it is a long list, AU Small Finance Bank as well added in there, could they actually play catch up?
Sandip Sabharwal: If we look at the internals of the banking stocks, especially the smaller ones, then what we need to see is that how the asset quality buildup is there, what have been the growth drivers in the past, how margins will get impacted for them, etc, and what the managements have historically said and what they have been able to deliver.

So, many of the smaller banks, that is why I do not invest too much into banks outside the top ones, because in the banking and financial sector, it is NPAs which determines how well you do on the asset quality.
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