H-1B, drug price noise won’t hurt Indian IT & pharma; festive cheer drives auto stocks: Vikas Khemani – News Air Insight

Automobiles are emerging as one of the biggest beneficiaries of the festive season, supported by GST cuts, lower interest rates, and a favourable base effect, said Vikas Khemani, Founder, Carnelian Asset Management, in an interaction with ET Now.

According to Khemani, leading players like Maruti Suzuki and Hyundai are witnessing positive traction, with strong model line-ups enabling them to capture demand. “Automobiles are consolidated players and the sector offers a better risk-reward compared to consumer durables, where valuations remain stretched,” he noted.

In the IT sector, Khemani downplayed concerns over the recent H-1B visa developments, calling them “incremental.” He added that Indian IT companies have already increased local hiring in the US and are driving growth through offshoring, AI, and digitisation. “Margins may see a temporary 20-40 bps impact, but costs will eventually be passed on to clients,” he said.

GCC trend expanding into manufacturing

He also highlighted the steady rise of Global Capability Centres (GCCs) in India, with nearly 100 being set up every year across hubs like Bengaluru, Hyderabad, Pune, and even tier-2 cities. “This is a big trend, not limited to IT but also expanding into manufacturing, and it continues to be a major job creator,” he added.

On market movement, Khemani pointed out that valuations had run ahead last year, leading to a healthy consolidation. “Markets never move up linearly. The resilience despite global worries shows India’s macro stability. The current consolidation is healthy and should not worry long-term investors,” he said.

No significant disappointment in earnings

Regarding earnings, he expects some spillover of sales into the coming quarters due to GST-driven delays, but sees no significant disappointments.On the pharma sector, Khemani remained optimistic despite US rhetoric on drug pricing. “Most Indian pharma companies are focused on generics, which are already far cheaper than innovative drugs. India accounts for 40-45% of the US generic market, and margins are modest. Any additional tariffs would ultimately burden US consumers, not Indian companies,” he explained.Also read: YES Bank shares rally 10% in 1 month as Sumitomo ups stake. Analysts eye Rs 25, is it a buy?

Overall, Khemani believes Indian equities are in a healthy consolidation phase, with autos leading the consumption story, IT showing resilience, and pharma remaining stable despite global noise.