The chemicals sector is set to enter an extremely challenging phase in the June to September quarter, founder of Abakkus Asset Manager LLP Sunil Singhania, said in an interview with Moneycontrol.
The market veteran said there is a mix two-three factors that will bite into the numbers of companies of the sector. "Prices of all chemicals have come off and the resumption of production of Chinese chemicals is posing stiff competition to Indian players in the market."
Singhania also mentioned the alleviated freight rates, which helped chemical manufacturers increase prices, are withering away.
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"While believing that the Indian chemical companies have a huge opportunity in the next 5-10 years, we expect some correction in the next three to six months ", the founder said talking about the outlook for the industry.
On the contrary, Singhania is confident about the financial sector and is of the view that in the next two-three years, credit demand is going to be good. As central banks pause interest rate hikes, Singhania predicts an uptick in credit demand, adding that he feels the balance sheet of banks and their asset qualities are 'phenomenal'.
He forecasts that growth for public sector and private sector banks, as well as some of the non-banking financial companies is going to be very positive even this quarter. "We are expecting like 40-50 percent growth for the entire sector year on year", he added.
Speaking on the overall economy, he said that even in 2022, when the world was struggling to come out of recession, India was growing at 7 percent. "Our view is that over the next five-seven years, also, we are looking at possible six 7 percent real GDP growth, which will translate into almost 10 percent nominal GDP growth". Singhania is optimistic that in five-six years, India will become a $6 trillion economy.
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