Jitendra Gohil, of Credit Suisse Wealth Management India, believes that there is a bullish sentiment in the country due to the fast-paced environment. He thinks that the market is underestimating India’s growth potential. In an interview with Moneycontrol, he stated that India’s growth rate in the financial year 2024 could exceed the estimated 6% rate. If there is a decline in crude oil prices due to a weak global outlook, India’s growth rate could be even higher. With more than 20 years of experience in the capital market, Gohil believes that with improved liquidity conditions, the NBFC and banking sectors will perform well.
He hopes for an improvement in liquidity conditions and a reduction in interest rates in the next 9-12 months, which will contribute to the good performance of NBFCs and the banking sector. Gohil also expects improvement in the expenditure level. However, he also warns that a poor monsoon can pose a risk to the market and the economy.
Are you bullish on rate-sensitive segments like banks, NBFCs, real estate, and autos? When asked this question, Jitendra Gohil recommended investing in the interest rate-sensitive sector for the past few months. He believes that interest rates in India are currently at their peak, which can benefit these sectors. Additionally, the RBI may have opportunities to cut rates in the remaining part of the fiscal year due to a decrease in inflationary factors.
Until now, NBFCs have shown weak performance. However, the possibility of a decline in interest rates in the next 9-12 months and an improvement in liquidity conditions put NBFCs in a good position for better performance. The second half of the year may witness strong credit growth in the banking sector. India’s growth outlook is quite favorable, which will benefit the banks. Regarding the real estate sector, Gohil mentioned that there has been a significant improvement in its fundamentals. He prefers large and premium developers.
What is your opinion on FMCG and consumer durables sectors? Can they benefit from rural recovery? In response to this question, Jitendra stated that these sectors might witness an improvement in margins. They can benefit from a sharp decline in commodity prices. Additionally, there has been some improvement in rural demand. The sales of passenger cars and tractors have remained strong, and now the sales of two-wheelers have also started to pick up, which is a positive sign.
The comments from company managements indicate signs of improvement in rural areas. Apart from the improvement in financing, the upcoming festive season, the cricket World Cup in October-November, and the general elections in May 2024 are some events that can boost consumer spending in the country in the next 6-12 months.
The supply-related issues in the auto sector have reduced, and there could be further improvement in the future. The auto sector’s situation and conditions can become more favorable with a decrease in commodity prices.
Positive Outlook for the Quick Service Restaurant (QSR) Segment
Jitendra also expressed a positive outlook for the Quick Service Restaurant (QSR) segment. With a decline in commodity prices, the industry’s situation is expected to improve, which will help in margin growth. However, the monsoon season poses a risk to consumption-related stocks.
Although a poor monsoon is a risk for consumption-related stocks, the government can take import-related measures as and when necessary to mitigate the impact.