Recession fears have been looming globally but MD and CIO of ITI Long-Short Equity Fund, Rajesh Bhatia, believes India is witnessing a K-shaped recovery along with an extremely strong demand at the higher end.
A K-shaped recovery occurs when different parts of the economy recover at different rates.
“When you look at India… when we speak to companies at a bottom up level, there is extreme bullishness, maybe it's the post COVID reopening confidence that is there which is buoying up demand,” Bhatia said in an interview to CNBC-TV18.
Bhatia is of the view that there is a lot of optimism as far as India is concerned on the back of strong demand across sectors as well as various measures that the government took over the last few years. The MD says that premium across sectors such as real estate, apparels, automobiles is also growing at a faster rate.
“So India is really seeming to be a great house in a really bad neighborhood…if you look across the world, there are concerns of a sharp slowdown. And given the inflation number that the US kind of saw, I think there is concern that you would need to probably trigger a recession, to bring that inflation down," he detailed.
The August CPI in the US soared to 8.3 percent on-year and 0.6 percent on-month against estimates of 8 percent and 0.3 percent, respectively. The surging inflation has raised the prospect of a more aggressive interest rate move by the US Federal Reserve.
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Talking about the diagnostic sector, Bhatia said digital players in the segment are accelerating growth in India, meanwhile, credible players (such as Tata 1mg) are not allowing these players to increase or even reduce prices.
“So, my sense is that as you move forward, this sector is certainly something that could see pressures at least in the short term and therefore, I think it is certainly an area which could be under pressure,” he added.
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