Fund Manager Talk: 3 sectors within capex theme can come under selling pressure, says Ambit’s Bhargav Buddhadev
Bhargav Buddhadev, Fund Manager, Ambit Asset Management, warns that few sectors within capex-oriented themes could see selling pressure. “Sectors like roads, railways, defense could see selling pressure given that the government in the recent budget has significantly cut down the budget allocations across these sectors, and in general as well. The Government’s capex budget expenditure, which saw a CAGR of ~12% over FY20-24 reduced to ~9% in FY25 budget estimate,” he says. Edited excerpts from a chat:
FIIs have been the biggest sellers in the Indian market in the last few days given all the worries related to recession, reverse carry trade of yen, and other global factors. By when do you think we can start seeing a reversal as far as FII mood is concerned?
Bhargav Buddhadev: Earnings should be the biggest driver for FIIs to start re-looking at India.
If we look at the global landscape, India continues to outshine with expected real GDP growth of ~7.8% vs ~4.7%/~3%/ for China/US in FY25/CY24. Few high frequency indicators on which India continues to shine include its manufacturing PMI, which has been in the expansionary zone since July’21 (58.1 in July 2024 vs 57.7 in July 2021), GST collection of INR 1.6 tn and PMI manufacturing index of 63.5 in July 2024, which is the highest since June 2010.
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