Wary StanChart Sec sees mkt sliding, FY13 may only rescue

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26 Aug, 2025 12:21

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Indian market is already in bad water but experts feel that it is going to be murkier. Rahul Singh, Head of Equity Research, Standard Chartered Securities is bearish on Indian market and has a 12-month target of 16000 which is 500 points lower than where we are today.

In an interview to CNBC-TV18, he said that it is not about this festival season and the quarter after but about what happens in FY13.  "I think the real concern in our view should be FY13 GDP growth."

He is also concerned that slowdown in consumption is likely to hit growth. There are other dampeners too in FY12. Two more rounds of 25 bps rate hike is expected in FY12 while earnings growth of 12% is likely this year with downside risks. "Sensex earnings is expected at Rs 1,320 in FY13," Singh reiterates.

He is equalweight on RIL and underweight on financials and industrials. As an investment strategy, he prefers exposure to HCL Tech in the IT space.

Here is the edited transcript of his interview. Also watch the accompanying video.

Q: You have a 12 months Sensex target of 16,000 levels, which is 500 points lower than where we are today. What has made you so sceptical?

A: The issue is now no longer FY12, but is FY13. Most of the downgrades and focus has been FY12, but there are no signs for the capex cycle to revive. The Reserve Bank of India's (RBI's) monetary policy has been much more tolerant towards lower growth. We would see a slowdown in the consumption expenditure in FY13.

While we have been focusing on investment and capex cycle, all this might boil over to the consumption expenditure looking forward to FY12, not about this festival season and the quarter after, but about what happens in FY13. The real concern in our view should be FY13 GDP growth and FY13 earnings growth, especially in the consumer discretionary segment.

The infrastructure has been going through a bad time and will probably continue for some more time. We need to watch the consumption expenditure, especially given the valuations in the pockets which can be classified under consumer discretionary and consumer staples.

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