Daily Voice: Rupee stability and easy monetary conditions to aid equity sentiment, says Anand Rathi’s Pradeep Gupta

Pradeep Gupta is the Vice-chairman at Anand Rathi Group

Pradeep Gupta, Vice-Chairman at Anand Rathi Group, said the near-term catalysts for equities include potential RBI rate cuts of 25–50 bps in this cycle, a festive-season consumption boost, GST rate cuts benefiting balance sheets from H2 FY26, and strong SIP inflows sustaining domestic liquidity.

Rupee stability and supportive monetary conditions should continue to underpin equity market sentiment, he told Moneycontrol.

On the IT sector, his view is cautiously constructive. He anticipates short-term friction but no structural earnings shock, with conditions likely to improve as uncertainty around US policy settles.

Do you strongly agree with other experts that India’s persistent earnings-downgrade cycle has now stabilised?

Yes, the earnings trajectory appears to have stabilised and turned positive. The corporate earnings environment cannot be characterised as lacklustre—it shows resilience and differentiated performance across market segments.

Does this imply that the risk–reward ratio is turning favourable for India?

The risk-reward is becoming more balanced. While valuation concerns persist in certain pockets and near-term episodic volatility exists due to US policy uncertainty, the domestic backdrop remains resilient. The RBI's raised GDP growth forecast and lowered inflation projection signal policy confidence.

Medium-term fundamentals—supported by domestic demand, tax changes, and regulatory easing—remain constructive. The current environment reflects short-term caution against a favourable longer-term trend.

What are the near-term catalysts for the equity markets? Do you expect the Nifty 50 to reach 27,000 if the India–US trade deal is finalised before the holiday season?

Near-term catalysts include potential RBI rate cuts (25-50 bps in this cycle), festive-season consumption uplift, benefits from GST rate reductions flowing through to balance sheets from H2 FY26, and continued strong SIP inflows supporting domestic liquidity.

Rupee stability and supportive monetary conditions should underpin sentiment. However, I would refrain from providing specific index-level targets like 27,000, as these depend on multiple variables including global risk appetite, actual trade deal terms, and earnings delivery.

Are you confident that next year will be better for IT companies?

The outlook is cautiously constructive. While H-1B visa concerns create headline risk and sentiment pressure, the impact is primarily sentimental rather than structural. Large Indian IT firms have already diversified through near-shore centres, higher offshore proportions, and automation.

Fundamental demand drivers—cloud modernisation, cost optimisation, and AI implementation—remain intact. We expect short-term friction but not a structural earnings shock, with the environment likely improving as uncertainty around US policy normalises.

Do you believe that financials and other rate-sensitive sectors have a strong growth runway ahead and that valuations remain attractive?

Yes, financials appear relatively better positioned. With an easing bias from the RBI (potential 25-50 bps cuts this cycle) and regulatory easing for credit and capital markets, the environment is supportive. Recent measures including higher financing limits and increased caps on loans against shares enhance liquidity.

Financials are among the preferred sectors within the quality-growth framework, especially those with strong balance sheets and consistent earnings power.

Do you expect a 10–11 percent increase in capex spending next year?

Improving domestic demand and easier working capital conditions expected from H2 FY26 do create a foundation for sustained capex.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.