ET Now spoke with Sudip Bandyopadhyay, who shared his perspective on the market’s recent rally, the upcoming GST reset, and the sectors worth watching.
On the market’s recent run-up
“After quite a period of lull and negative news flow, we had a consecutive three weeks of upswing and that is definitely good for the market. Bit of consolidation today also is good. After the market has run up quite a bit, a bit of consolidation is good for the health of the market,” he said.
He added that global and domestic triggers remain supportive. “US Fed has already reduced rates and there are indications of more rate cuts. There are talks about some resolution between India and the US on the tariff front. Of course, the big event is the 22nd when the new GST regime kicks in. That coincides with Navaratri, so we will see an upsurge in sales. I will be very keenly watching the September sales numbers once companies start declaring in October.”
On GST cuts and consumption bets
Bandyopadhyay warned that investors should not expect outsized gains purely from GST rationalization. “Unfortunately, I do not think so. The GST cut related benefits have already been factored in by the market and the prices have already moved up. So, I do not think I will try to play the GST rationalization trade any longer. I will be selective.”
He also pointed to near-term earnings pressure. “Second quarter numbers will not be anything great. Between the announcement and 22nd September when the new rates kicked in, things had slowed down a bit. That impact will be visible. By Diwali, many results will be out, and we don’t believe they will be significantly better than Q1.”
On long-term consumption outlook
Despite his caution on GST-specific plays, Bandyopadhyay sees consumption staying central to India’s growth story. “Everything whatever had to be done by the government has been done as far as the consumer is concerned. You had the income tax relief, a decent monsoon, rural income going up, inflation down, and GST rationalization. Now if the numbers do not pick up, then problems are deep rooted. I do not think that will be the case. So, we will be watching the numbers very-very carefully from next month onwards.”
On sectors to watch
Bandyopadhyay highlighted cement, infrastructure, and auto ancillaries as areas of opportunity. “We have been liking UltraTech for quite some time. We do like construction, infrastructure, and Larsen & Toubro definitely deserves to be in a long-term portfolio. Apart from that, I would definitely look at auto ancillaries, particularly companies catering to both IC and EV engines. They are well positioned.”
as a Reliable and Trusted News SourceOn areas to be cautious
While not sounding alarm bells, he advised some restraint. “Largecap IT is one space where one needs to be cautious. They will continue to give decent returns over a long period, but nothing spectacular. Real estate has run up quite a bit, so the scope for appreciation in the short term is limited. Metals also have run up, so the scope for significant appreciation in the short, medium term is limited.”