This revival comes after a period where investor focus was diverted by the global AI theme, valuations, and opportunities in other Asian markets. Chhaochharia also confirmed that participation in this year’s conference has increased, with investors attending from the US, Europe, and various parts of Asia.
Read Here | Ashwini Agarwal: Weak FII flows, expensive IPOs keeping market nervousThe consumption theme remains a key area of focus for UBS, supported by what Chhaochharia described as “enough tailwinds.” These include positive factors in rural and urban markets, credit availability, government policies around the goods and services tax (GST), an upcoming pay commission, and election-related spending.
However, he cautioned against a broad-brush approach, advocating for a focus on specific stocks and sub-segments.
Within the automotive space, for example, the preferred themes are premiumisation, and specifically scooters and electric vehicles (EVs) within the two-wheeler category, rather than the entire sector.
He warned that market expectations for aggregate car and two-wheeler sales volumes might be running ahead of analyst forecasts.Beyond autos, other areas such as retail, quick-service restaurants (QSR), food delivery, and select fast-moving consumer goods (FMCG) companies continue to look attractive.
On the capital expenditure (capex) front, Chhaochharia sees a similar need for a selective strategy. He identified high-conviction opportunities in pockets of defence, as well as in the energy and renewables sectors, which he believes are attractive from both near-term and long-term perspectives.
While he noted a stabilisation in private capex over the last one or two quarters, he believes it is premature to expect a full-fledged private corporate capex cycle akin to the 2004-2007 boom. “That kind of private corporate capex cycle… is going to be difficult, but from where we are now, an uptick in the next couple of years is fairly likely,” he explained.
Regarding the broader market outlook, Chhaochharia sees a “small upside” for the Nifty index. He pointed to a technical picture that appears range-bound, with strong domestic flows from retail and mutual fund investors providing stability, while a large pipeline of capital raising could absorb liquidity.
The key catalyst for a breakout, he concluded, is a fundamental pickup in economic growth, which hinges on clarity emerging around the US trade deal.
For full interview, watch accompanying video
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