homemarket NewsCost pressure may hit consumption in near term; bullish on TCS, ICICI Bank, SBI: Macquarie
Cost pressure may hit consumption in near-term; bullish on TCS, ICICI Bank, SBI: Macquarie
In an interview with CNBC-TV18, Sandeep Bhatia, India Country Head, Macquarie Group, said that Indian economy is well placed and the long-term story looks good. He is positive on ICICI Bank, SBI in the near-term. Also, TCS remains the top pick in the IT space, followed by Infosys, he shared.
Sandeep Bhatia, India Country Head, Macquarie Group, on Monday, said that Indian economy is well placed and the long-term story looks good. He, however, mentioned that near-term issues for the economy include higher input costs and RBI tightening. He further cautioned that consumption could get hit in the near term due to cost pressures.
He said, “India is, in the long-term, one of the best places. So, near-term definitely headwinds. RBI is indicating that rates are set to rise. So across the board cost pressures will increase, but this will be one market which will raise its profile in the longer term in the entire emerging market basket.”
Detailing about the issues surrounding the IT sector, he mentioned that margin pressure could play spoilsport. He explained that TCS is Macquarie's top pick in the sector, followed by Infosys.
He said, “IT is at the cusp of a huge opportunity. We put a report this morning and we think essentially, the entire digital architecture of the world is going to change and Indian IT will be key to making that happen. So that is a big opportunity that is opening up. We definitely like TCS as our top pick in that and then, we like Infosys and HCL Technologies. IT will remain the leader for most of this year.”
On banks, he said that he is positive on ICICI Bank and State Bank of India (SBI) in the near-term. “Some of the private sector banks, we also think can do well. But in the near-term, ICICI Bank and SBI look good,” said Bhatia.
Also Read: Bullish on TCS, expect 2.4% growth in dollar terms in Q4FY22: HDFC Securities’ Apurva Prasad
Bhatia believes that the auto sector is bracing for a slow recovery and Macquarie will be revaluating the sector in H2FY23. “Auto looks set for a slow recovery, not a huge fast-paced recovery that one can expect. There are structural headwinds on EVs (electric vehicles) and where each manufacturer stands in its EV strategy, but on the whole, it’s part of a broader consumption basket with interest rates also rising. The cost of cars going up will have an impact. So, I would wait for the auto sector to come through the second half of the financial year. One can then reevaluate,” he said.
Watch the video for the full interview.
(Edited by : Dipikka Ghosh)
First Published: Apr 11, 2022 1:50 PM IST
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