“Clearly, there has been a pivot from the government side to move into demand-style stimulation,” Krishnan said. From 2018 to 2023, the policy focus was on capex, production-linked incentive (PLI) and investments, while consumption lagged. With most portfolios heavily allocated to investment themes, he said the change “will require a significant change in portfolios,” adding that stronger demand could also revive private investment appetite.
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Large private banks also remain a structural story, not just a consumption play. Four to five big banks have strong access to capital, are trading above book, and face limited competition. “The overall economic activity, which is to potentially double our economic size over the course of maybe the next seven, eight or maybe 10 years… the banking system will do well,” he said.In pharma, US generics have seen temporary profit boosts that are unlikely to sustain. He said the AMC has booked profits in that segment. Instead, the focus has shifted to diagnostics and domestic pharma.
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Competition in diagnostics, which intensified during COVID, has started to ease. Aggregator platforms are raising prices as they move towards profitability, while incumbents are focusing on volumes rather than margins. Krishnan also expects new demand drivers: “In India, we are going to see a move towards GLP-1… doctors, physicians, as well as patients, become a bit apprehensive in terms of potential side effects, and therefore that will also lead to a boost as far as demand is concerned.”
For the full interview, watch the accompanying video
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