Enough triggers for earnings growth even without India-US deal'

A trade deal with the US is important for India, but even without it, there are enough triggers to drive earnings growth and take the markets out of the consolidation phase, according to Hiren Ved of Alchemy Capital Management.

- Srushti Vaidya [e-mail]

The government has reduced income tax and the goods and services tax, and the Reserve Bank of India (RBI) has front-loaded repo rate cuts, injected liquidity and eased credit norms, said Ved, chief investment officer at Alchemy Capital. “These measures should kickstart growth in the second half and lead to the much-wanted earnings revival.”

He cautioned that the valuations in the unlisted space remain frothy.

Most of the unlisted deals are structured, where the investment banker prices them to perfection, he said, adding that investors must be very selective while entering the unlisted space.

Ved sees opportunities in AI, stressing that while Indian companies have not built large language models (LLMs) like ChatGPT, data centres and related AI infrastructure provide an opportunity to invest.

How is the trade deal going to pan out?

I’m not too worried because eventually we will get a deal. Like in any deal, there are pulls, pressures and negotiations. The thought process was that probably India would be one of the first few countries to strike a deal with the US. It now seems like we are one of the last few countries to strike a deal.

If a country aspires to be a great power, it should have the conviction and the maturity to deal with a great power like the US.

If you buckle down and agree to a deal that may not necessarily be fair, you are not displaying your ability to be a great power yourself. India is being patient and waiting for the right deal to happen, acting like how an aspiring great power should. Despite the anxiety that people might have about how quickly we can reach an understanding, eventually we will have a deal.

Deal or no deal, are there enough triggers for markets ahead?