“Incremental buying now is getting more towards midcaps because of the valuations. The large banks are all trading north of two-two and a half times book and the midcap banks are anywhere around one and below one. So there is a decent valuation gap between the two and that is the reason incremental buying is happening more in mid-sized private banks.”

“Most infrastructure projects in China are in deep losses. It is not bad from an India perspective longer term because it puts pressures on commodities especially steel, metals, plastics, etc, which helps India in its inflation fight. Longer term, that trajectory is changed and directionally, India is much better positioned than China and this will play out over the next few years.”

“I would agree that there are opportunities in auto, auto ancillaries. Maruti, M&M are very well placed for the next one or two years. The CV cycle is going through slight sluggishness and that is something we need to watch. After that plays out, maybe Ashok Leyland could give opportunities. In auto ancillaries, I like Apollo Tyres and Bharat Forge.”

“We need to provide more jobs to our people, the quality of the jobs is very poor but beyond that, I cannot say anything. Yes, there are signs of recovery. How good that recovery will be or whether it could be sustained, depends on a whole lot of imponderables. At the moment, I reserve my judgment on the health of the Indian economy.”

“Since we are conservative, India will never be able to grow as quickly as a high debt fuelled growth country like China but we all know debt can have its own problems and that is exactly where the Chinese economy is when their leverage in the housing market is coming to haunt them. ”

“It was tremendous to see new age tech companies making commitments to make money because if all you do as a listed entity is raise money, then obviously the future will be quite grim. We will keep an eye on them and I am praying that we see these tech companies becoming money spinners both in the free cash flow sense of the word and in the stock price sense of the word.”

"While some of the earlier feared risks of very high crude oil prices, a sharper depreciation in the rupee and therefore a persistently high inflation, are now receding, the risk of earnings downgrades from the present consensus Nifty 50 earnings estimates of 14% (already cut from 15-16% a few months ago) for the 2 years of Fy22-24, to further lower levels of 12-13% or so continues to exist."

This rally was unexpected as the sentiment was largely negative and there were too many short sellers globally, when the US Fed made the statement that they had reached a neutral rate. We believe the market is not cheap at current levels, but if FIIs keep buying, markets will head higher. This rally now looks a bit stretched, but we can be wrong, if interest rates have reached the peak.