Daily Voice: Abakkus fund manager sees high-growth momentum to persist for new-age companies

Over the past three months, the rupee has already seen a sharp depreciation. Domestic GDP growth has picked up, forex reserves are strong, oil is still low, and the RBI stance is accommodative. We feel it is unlikely that the rupee will further weaken on its own against the dollar in 2026. We expect the USA tariff uncertainty to be addressed soon, and this will remove the overhang.

Is the lack of clarity on the trade deal impacting the currency?

Yes, delays in concluding the US trade tariff have impacted INR performance. It’s just not the delay; the expectation, too, has been reset, that the tariffs on India now will be similar or even higher than its peers. The earlier expectation was that India would have favourable tariffs.

What is your view on the RBI’s monetary policy? Do you expect rate cuts in 2026?

With the recent 25 bps rate cut RBI has already moved quite ahead in the rate cut cycle. Post the recent move, we feel another 25-50 bps can come in 2026, but that would be need/ event dependent.

Right now, inflation print is low gradually as the base effect goes away, the inflation number will inch up, hence there won't be room for big rate cuts.

Do you foresee robust growth trends in new-age companies? Are you positive on the sector?

Yes, we expect the new age companies to continue with their high growth momentum as more users go online/digital and penetration improves. From an investment perspective, we have a positive outlook on this sector, but at the same time, one needs to be mindful of the valuations one pays.

The good thing today is that many of these new-age companies have achieved EBITDA breakeven or are PAT positive. This makes them more investable for secondary market funds like Abakkus.

Do you think the earnings growth outlook is still tepid?

We expect FY27 earnings to be better than FY26. We are already seeing green shoots of recovery. A combination of tax cuts, rate cuts, and GST cuts means that the government's focus is on improving growth momentum.

We feel the government will act further if growth doesn't pick up, and this means that earnings growth, too, is likely to improve.

What could be the biggest challenge even if India signs a trade deal with the US?

The biggest challenge globally is to navigate the tepid global growth outlook. Domestically, the challenge stems from managing the Centre + State fiscal deficit. Post the tax and other cuts government has sacrificed its revenue, and that needs to be compensated. This is the challenge the government faces today.

Do you believe FPIs will resume investing in India in 2026?

Yes, Indian equities have already gone through 12 months of time correction and have underperformed peers. Valuations are now reasonable at the 10-year average. FIIs have always invested in India for its growth potential, and as growth momentum picks up, we expect FIIs to come back.

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