Speaking to ET Now, Anand said, “Markets are likely to probably be range-bound in the near term. You are likely to see it go up and down within a fairly tight band.” While Q2 results have shown improvement, he stressed that how demand recovery reflects in Q3 and Q4 numbers will be critical. “Now, how well this plays through in the Q3 numbers, which will start in another 20-30 days from now, that is going to be very-very key to understand the future direction of the market.”
He added that external factors remain a key overhang. “The other core thing that the markets are really focusing on is going to be what is happening with the rupee and what is happening with the US-India trade deal, and the two of those are quite linked.”
Until clarity emerges on these fronts, he expects markets to remain in a tight band. “As these come in, you should hopefully enter the next phase of the market bull move,” Anand mentioned.
On earnings, Anand said digital platforms continue to stand out. “Digital and digital platforms firstly continue to be very robust in terms of earnings growth, I think that is something which should continue to remain very robust.” Among traditional sectors, he sees scope for recovery in lending. “You have had, especially for banks, a decent amount of NIM pressure as well as asset quality issues. Both of these clearly seem to be close to bottoming out,” he said, referring to net interest margin pressure and asset quality concerns in banks.
Consumption is another area he is optimistic about, backed by policy support. “You have had a number of things which are all beneficial for consumption demand, starting from income tax cuts… GST cuts… a very significant decline in interest rates… a fairly decent monsoon.” While autos have led the recovery, he expects broader consumption to pick up later. “It is really Q4 and the next year is when this overall recovery across other segments of consumption ex-auto… You are likely going to see this.”
Reiterating his long-term conviction on internet companies, Anand said, “We believe this decade is going to be about this particular theme.” He acknowledged near-term headwinds in quick commerce but maintained a long-term view. “These companies are not this quarter or this year bets. These are bets in terms of what these companies are going to develop over the next five to seven years.””We see a lot of these companies have already achieved significant levels of scale. Meesho, in less than five years, has become the second-largest e-commerce platform in terms of volumes. We have seen the way Groww has grown. We have seen Zomato, Swiggy, etc. These companies are growing incredibly rapidly. They are already very large in terms of their respective market shares, and the relative extent of growth outperformance to traditional businesses is only going to continue going forward,” Ashi Anand mentioned.
On competition, including Zepto, he said, “Most people in the market, including us believe that quick commerce is going to be dominated by these three players over the longer term and really all three are really quite interesting.”
Looking ahead, Anand summed up the bigger picture: “As you go into FY27, not only do you have the whole banking sector with quite strong earnings growth outlooks, consumption hopefully coming back, and if you do have capital formation trends out there also turn positive, that is really when the overall market earnings growth trajectory into FY27 could look quite interesting.”