I assume all of us are hooked on to Trump‘s tackle, ready to listen to if he’s going to say something particular on Canada and Mexico tariffs or not. However how do you assume this whole tariff tirade goes to essentially play out as a result of the chatter within the US as nicely is tariffs usually are not good for them both.
Rajeev Agrawal: So, no, completely, tariffs have created a number of uncertainty in the entire world and the way they’ll play out. Initially, the expectation was that tariffs is a method for negotiation to make sure that US firms get their justifiable share after they go into different international locations. Nonetheless, it stays to be seen if that’s what it’s or that is really a brand new world the place we mainly have all people having a tariff barrier and the free commerce that we have now all grown up with turns into much less and fewer.
So, it’s nonetheless early days is what I’ll say and we’ll see how that performs out within the subsequent few quarters.As an investor although these are unsure instances and that’s solely placing it mildly. What’s it that you just do as a result of one has seen cracks emerge in US markets as nicely. I imply, if you happen to have been to take inventory of what, say, maybe a Tesla return has been from the beginning of the 12 months to now, it’s getting somewhat alarming for them as nicely.
Rajeev Agrawal: The markets are very nervous exactly as a result of there may be a number of uncertainty and as everyone knows markets don’t like uncertainty. And the brand new administration has offered loads of it. So, what can we do in such conditions?Now we have at all times been targeted from our perspective on taking a look at firms one after the other and really as a result of we concentrate on Indian equities, what we have now been prioritising are firms that profit from the Indian development story and never as depending on export markets and that could be a theme which is able to turn out to be somewhat bit extra outstanding as we go ahead due to the entire tariff state of affairs.
However I can even say yet another factor and that’s that presumably all this tariff might finally assist among the Indian firms who export as a result of if you happen to tariff and you’ve got restrictions on most international locations, the place will you get the products from?
So, we must see how this complete shapes up, however there is likely to be a risk of a long-term profit for international locations like India.
Nicely, the tariff considerations are taking part in heavy on the fairness markets, however the place do you see the cash flowing in numerous asset lessons, which is wanting extra profitable to you as a result of it’s simply the fairness markets again within the US taking a little bit of a U-turn, the rising markets a bit underneath stress, barring China. Assist us perceive that inside the asset class, which is wanting a very good wager to you proper now?
Rajeev Agrawal: So, really, we have now a contrarian opinion there and our contrarian opinion is that equities have gotten extra profitable at this level and the reason being apparent that the costs have come down.
And when the costs come down, when there’s a sale that is occurring in equities, so long as the enterprise prospects are cheap given the worth, then they turn out to be extra compelling.
And so be it India, be it US, there are alternatives, there are pockets of alternatives. And since we’re considering from a couple of years perspective and never a couple of quarters perspective, we really feel snug that these are literally or this drawdown is finally giving us a possibility to load up on issues that we’d need.
What’s it that you’re loading up on?
Rajeev Agrawal: I ought to form of simply take a step again and say, load up means it’s at all times nibbling, however progressively maintain constructing our positions. And what we’re, and that is we have now talked about it previously as nicely, I do assume financials in India proceed to look good.
There was somewhat little bit of a setback within the first few quarters in monetary 12 months 2025 as a result of economic system was not doing nicely after which finally the MFI saga that performed out in India. However with the brand new RBI governor, we’re beginning to see the restrictive coverage changing into much less restrictive.
We noticed the Q3 GDP quantity, we predict the GDP is as soon as once more beginning to get well and subsequently, we really feel that financials, which finally must do nicely if the economic system has to do nicely, is an efficient place.
And once more, the essential factor with financials is it’s focusing rather more on the Indian economic system and subsequently somewhat bit not impacted by what is going on with the entire tariff state of affairs.
However aside from that, every other pocket which is wanting engaging to you given the truth that markets have corrected and there are deeper cuts inside the broader finish of the market?
Rajeev Agrawal: The opposite segments which we did speak about proceed to be attention-grabbing. Certainly one of them is the true property. Once more, a major minimize in the true property shares and the way these shares have carried out. But when we have a look at how the pre-sales numbers of many of those actual property firms are, they proceed to do fairly nicely.
So, what was somewhat little bit of a euphoria out there has come off and I might say that many of those actual property names are beginning to look fairly priced. I imply, one has to once more have a look at firm by firm, however many of those firms have come down and based mostly on one’s consolation, they will have a look at that.
So, actual property is one other, capital markets is one other very attention-grabbing space which has been overwhelmed up badly because the inventory markets have come down and that’s once more creating, these capital markets have been minimize between 30% to 40% the gamers, numerous gamers and so that’s one other space that you’re beginning to see a number of alternatives once more from a couple of years perspective, not from a couple of quarters perspective.
In your individual fund and naturally the shoppers as nicely, how a lot money ranges are you continue to sitting on?
Rajeev Agrawal: So, we’re maintaining some amount of money I might say within the excessive single digits as a result of what we do is we wish to be certain that money is out there because the alternatives come. So, despite the fact that we like firms, we’ll take cash out of positions the place we predict they’re absolutely priced. So, there’s a little little bit of a rotation that’s taking place within the fund the place we’re promoting some positions, making certain that we have now money in case higher alternatives emerge in order that we are able to bounce on these.
