“Consumption has been weak for nearly two years, and GDP growth has been impacted by tariff uncertainty. A GST rejig, along with earlier measures, will spur demand,” Rajguru told ET Now.
Market outlook
Rajguru pointed out that Indian equities have been the worst-performing among the top 22 global markets in USD terms this year, underperforming emerging markets by over 20%. “Most of the negative news is already priced in. Any resolution on the tariff front by November could trigger a strong rally, given our underperformance,” he said, adding that staying in cash is not advisable.
Sector strategy
On sectoral preferences, Rajguru sees consumption as the biggest long-term theme, particularly in automobiles and low-ticket discretionary items. Auto sales remain below 2019 levels, but stimulus measures could revive demand, he noted.
He also highlighted sectors where competitive intensity is easing—such as telecom, airlines, and insurance — as promising plays over the medium term.
View on IT and pharma
Rajguru maintained a neutral stance on IT services, citing slowing US growth. However, he believes large-cap IT companies become attractive tactical buys when valuations drop closer to 18–20 times forward earnings.
On pharma, Rajguru is more optimistic, especially on hospitals and contract development and manufacturing (CDMO) firms. “Hospitals are a strong growth play with rising health insurance penetration and improving revenue metrics,” he said. Select opportunities also exist in US generics post recent corrections, he added.
The road ahead
Rajguru expects the benefits of current policy measures to show from the December quarter onwards. “With both RBI and the government pushing growth, India could see a turnaround soon. For investors, this may be the right time to selectively accumulate,” he said.
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