According to Siddharth Bothra, Fund Manager - Equity at Ambit Asset Management, the US tech companies are not only global tech leaders in most segments, but also at the forefront of upcoming technological advancements. Hence, the US tech sector does provide more promising long term investment opportunities, he said in an interview to Moneycontrol.
However, "average Indian IT companies have traditionally not invested much in R&D and innovations; this could now start negatively impacting their growth prospects," he added.
Siddharth Bothra believes near term outlook for growth in large FMCG companies does look challenging. "While rural agriculture real wage grew 3.4% in Q4FY25, a six-year high, following an average decline of 0.3% in previous three financial years, growth acceleration seems to be missing in the last few months," he said.
Do you expect retail inflation to remain on a declining path for the rest of the calendar year?
India’s headline retail inflation dropped sharply to 2.1% in June, lowest in over six years, largely driven by steep fall in food prices. This was the fifth consecutive month that inflation has stayed below the RBI medium term target of 4% and eight straight months below the upper limit of 6%. Food inflation which roughly accounts for ~50% of the CPI inflation has continued to remain weak in May-June 2025.
RBI has also revised its CPI inflation forecast down to 3.7%, while cautioning about risk from global uncertainty and supply side risks. Hence, unless there are some global surprises, the retail inflation outlook near term does look muted.
Given the easing inflation and the focus on growth, do you think the RBI could consider one more rate cut before entering a prolonged pause?
RBI in June 2025 had made a large rate cut of 50 bps to 5.5% as part of efforts to stimulate India’s slowing economy. The signals from the central bank suggests that additional cuts are possible if inflation trends remain favourable and growth pressures persist. Nonetheless, factors such as i) impact of US trade tariffs on US/ Global growth and inflation, ii) US trade tariffs on India's exports and iii) Fed policy outlook and strengthening yield will also play a key role in MPC's decision for going for a rate cut in August 2025.
In your view, are retail NBFCs likely to outperform banks in the near to medium term?
Retail NBFCs in the near to medium term could outperform banks in credit growth. Given their focus on high-yield, retail-focused lending segments like gold loans, MSME lending, and personal loans, which are expected to see continued momentum. The recent interest rate cuts are also likely to benefit NBFCs more than banks, as many NBFCs have fixed-rate loan books, and their liabilities can be repriced downwards more quickly with rate cuts.
Do you believe large FMCG companies will struggle to grow beyond high single digits in the coming quarters?
Near term outlook for growth for large FMCG companies does look challenging. While rural agriculture real wage grew 3.4% in Q4FY25, a six-year high, following an average decline of 0.3% in previous three financial years, growth acceleration seems to be missing in the last few months.
Moreover, the urban consumption trends continue to remain muted on the back of higher lifestyle inflation and reduced discretionary spends. However, industry participants have hinted at a smart recovery for the premium end of the market, which could possibly throw up some investment opportunities.
With the growing focus on Generative AI, do you think revenue growth for IT companies will remain in single digits over the coming years?
Generative AI represents both an opportunity and a challenge. Disruption is likely to further accelerate in the next few years. IT companies which can embrace Generative AI stand to possibly benefit significantly, while companies which fail to reinvent themself and embrace Gen AI will face serious challenges.
At this point, is it more attractive to invest in US tech companies rather than Indian IT companies?
US tech companies are not only global tech leaders in most segments, but also at the forefront of upcoming technological advancements. Average Indian IT companies have traditionally not invested much in R&D and innovations; this could now start negatively impacting their growth prospects. Hence, the US tech sector does provide more promising long term investment opportunities.
Are you currently bullish on gold and bearish on the US dollar?
The sharp jump in gold prices over the last few years, cannot be explained by a sudden increase in the demand for gold as jewellery or for its use in industrial production. Rather, it reflects the shifting demand for the yellow metal as a financial asset.
Historically, gold has been held by private investors who see gold as a good way to protect wealth during inflationary periods or when there is substantial economic or political uncertainty as well as by central banks as part of their international reserves. However, gold performance over the last few years, to our mind, is a reflection on Central Banks/ investors' view on the global financial system and view on the global reserve currency in some way.
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.
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