What do consumer durables sectors do this intake? Given everything the government has done, it should have happened a little later that day, at least the impact on the stock market much earlier.
Ashi Anand: The broad way we really look at the market is that the market is in watch mode after a little while. You really don’t have a clear direction in terms of which part of the market will drive the next big move. So, specifically for the consumer’s questions about durable goods, the very important thing so far is the big positive this year is the decline seen in interest rates. With 100 basis points with reduced interest rates, this frees up some household income that was heading towards EMIS.
So, in the overall market context you are still trying to see and identify which direction the market is going, you have these economic cyclical things that have been very successful over the past few years, but you have basically not yet revealed the very high bases and growth of that base.
There is uncertainty in the global aspect. Some banks are likely to see some NIM pressure soon. Of all of that, consumers operate as a slightly safe haven, and there is some movement in the space as interest rates drop, hoping that rural consumption will return and urban consumption will return.
There is a news flow that Motilal Oswal AMC actually exceeded Rs 1.5 crore at AUM, and we can see the excitement of the inventory, and this theme is in stock as this theme works well, saving stock. Give us your senses, how do you see this particular theme, is it justified by the kind of growth the company is posting?
Ashi Anand: So, savings finance is one of the more interesting themes we’ll be playing over the next decade. Just looking at the intrusion levels across India’s financial instruments, there is an incredible range for the transition of traditional real estate, fixed deposits, and financial savings from gold to financial markets when compared to other emerging countries, some more developed countries, etc. on our size.
When you are considering playing this theme, you need to be a little careful about the part of the theme you are playing. So this is the space we have very positively in our portfolio. What we are very clear about is that asset management, asset management is carried out. We consider these to be direct theatres about the growth of India’s wealth and asset management sector.
Securities companies are actually a bit more careful place. It is important to understand that the very large amount of growth seen in post-Covid brokerages comes from very speculative F&O trading. This is a space that is very clearly tightened by regulators. They have already introduced a variety of measures, and more measures can be introduced, and the overall F&O activity has declined very rapidly.
While going through this radical change in regulations, you’ll want to be a little bit more careful about your exposure to brokerages, especially in terms of how you’re paying. But asset management, asset management, insurance, all of these are segments we believe are very attractive and hold a reasonable portion of our overall diverse portfolio. Securities companies can be very interesting too, but we have to wait to see the current regulatory environment form.
