Budget 2020: Govt needs to stimulate demand, continue spending, says Pacific Paradigm Advisors

Talking about her outlook for the market per se, she said market conditions globally are still benign. "The general outlook, globally, is fairly conducive for equity markets except that we have geopolitical issues rising and that could be a concern if things escalate."

"Other than that, there is not a lot of risk. The concern is valuations and particularly in the US, valuations are not that attractive and therefore while people still want equity markets, they would probably look outside the US, which is what they are doing and emerging markets (EMs) have been a beneficiary in the last few months and I think they might continue to be a beneficiary,” she said.

When asked if she would bet on nominal growth recovery in India, she said, “Budget is right around the corner and one cannot predict what the budget might do but my thinking is that, we probably will have a cyclical recovery of some sort. Although there are some structural issues, which may take longer time to address but there are some pockets of pain that can be addressed. Therefore, there may be cyclical recovery, there are some signs of that - steel prices, commodity prices in particular have picked up. We are seeing a recovery through that segment and that is a leading indicator."

Moreover,  with interest rates having come down it has helped certain companies with big debt burdens. If the government continues to spend on infrastructure then that too will provide some stimulus, she said.

"I do expect that there will be some kind of a cyclical recovery. I do expect that we have hit a trough and that things should improve,” she added.

Talking about their investment strategy, she said, right now it is time to be stock specific and cannot take big sectoral call. Quality, governance, balance sheet are important factors to look at.

“In some companies that are catering to the rural areas, they are not seeing  much pick up but others they are, so it depends on the product that they are selling and what is core to what the farmer wants but it is not all bad. In financial sector, one will have to be very company specific. There is a lot of growth still in certain pockets of loans as well; personal spending in some areas is still growing whereas in others it isn’t. So there are mixed signals but I think generally things are looking like they are on the improving path,” Sinha noted.

Sector specific, she does not see reasons to worry about IT space. “The sector is much more of a global call and not an India specific call. Globally, most IT companies have said that the BFSI sector has seen some slowdown and that is more US specific but I would still say that growth has been fairly decent."