Gurmeet Chadha Warns On White Collar Sector Slowdown | Bullish On Auto, Power & Defence Stocks

Ajouté : 2026-05-07

[00:00:00]Gurvit Chhatta with us to talk about his thoughts on the markets and the way ahead. Gurit thanks so much for joining in on on a on a short notice must say.

[00:00:08]So really appreciate your time.

[00:00:11]>> Gurit while the broader war overhang remains and the nifty sluggish the broader markets have hit highs today. So if you are in the broader markets you've come back to the normal bull market that you were in. Is that a right way to think of it or is this something that could correct?

[00:00:30]Need selectively? Yes. So if you for example were in energy space and power equipment space, you are actually probably better off than what you were let's say 6 months back. Uh if you rightly positioned uh in defense, that space has done very well. Uh if you've also picked up uh consumption names where especially food and beverages segment, look at Nestle's number, look at some of the other uh commentary which is coming, you've done well. But let's say if you've been and maybe if you take bang nifties move in last few days maybe that as well but if you are still in little bit more in oil sensitives uh you know I think consumer durables etc. So it's it's been a bit of a mixed bag and and that's where I think uh it becomes very tricky in this market. I think one concern which is there is that fis are still big sellers. Uh yesterday also we we saw 6,000 cr kind of a selling. I think vitally they are already 156 billion dollars out of India and this is coming when globally flows have been very good. Just look at Cosby, look at Taiwan, look at some of the emerging markets. So I think the pressure now is more supply side and I think the market is now factoring in some kind of a resolution happening over the next few weeks. Uh but it's this supply pressure I think which may keep things under check for some more time.

[00:01:49]Gurm um you know I'm wondering if this is that moment that investors will look at in hindsight and say did I miss this moment because uh those opportunities are coming in fits and starts right uh unlike a co where you had a very clear crash down and then you know if you had the guts to take a contrarian view you would here those opportunities are presenting themselves in little flashes and bursts >> are we looking at some of those opportunities right now from a two year to your perspective.

[00:02:21]>> Yeah, 100%. Uh you know just look at the way as I was telling you the entire power equipment space has done. If you picked up any transformer stock, you would have made 30 40% in last few weeks. Uh you would have picked up any good transmission distribution name whether you were in Itachi, Genova, whether you picked up a cable and wire name like Polycap or KI or you picked up something uh you know even in some of the PSU names in renewables I think you would have done well. Polycap numbers were phenomenal yesterday and management guided for better growth. Even the FMEG segment did well. uh so I think it depends upon your positioning similarly if you are in tier 2 banks and PSU banks versus SGFC ICICI you would have we have done a lot of you know uh good work in terms of to your portfolio so I think it's a market where it's rewarding earnings it's rewarding good guidance and it's punishing uh subdued performance despite valuations being reasonable so it because the commentary was so weak despite valuation comfort you know stocks haven't done well and you have somebody like a co-forge delivering good set of numbers valuations s being rich and markets markets rewarding. So I think I think the only hedge now is uh is is good earnings and good outlook and that is how the market is getting positioned. I also think at some point of time some bit of unwinding may happen in the AI trade. It's becoming too stretched in my view. I may prove wrong. Markets can can always make you look stupid in the short run but it's getting stretched. You know look at Cosby 40% movement in a month.

[00:03:52]Look at some of the Korean stocks. Look at some of the other names. I think it's too sharp a movement. I think some distribution will happen and that's when probably assuming oil prices remain low, you'll see a broader participation coming from some of the weaker paints as well.

[00:04:07]>> Um are you liking what you're seeing with the auto space Kit and especially the two wheelers?

[00:04:14]>> Oh yes, we've been we've been overweight auto. We we have TVS in in in in the OEM space. We have Sandar technology which we added a bit more where 60% portfolio is more two wheelers 40% is four-wheeler. Sundar is the biggest supplier to TVs almost 55%. Uh and and they are now all three four verticals are doing well. Fabrication is doing well. Log division is doing well. EV portfolio is shaping up nicely. So that's one stock we added. We added UMX that's very done very well. It makes LED lights uh largely and and that's also done well. Of late we have added one very small autocillary which is Rajatan Global. They make bead wires for tire.

[00:04:54]The stock got battered in 2022 postcoid after their Thailand business got impacted by Chinese dumping. That business has stabilized. They set up a new plant in Chennai uh which will contribute another 50 60,000 tons this year. So you know good operating leverage kicking in and hopefully with broader auto demand remaining good I think this this should do well. So, so I think in our auto auto ancillary mobility portfolio uh we must be about about 18% uh roughly in our in our portfolio.

[00:05:24]>> Gurit uh what is it that you would look to get off the train in uh presumably in the broader end of the market because this has a rising tide. It has carried a lot of boats along with it. Not everything is going to benefit. In fact, some things might get impacted badly because of higher crude and otherwise.

[00:05:44]Uh so N as I said the the I agree with you in terms of uh you know fundamentals but as I said wherever earning momentum is good market is rewarding it. Uh so maybe maybe the energy portfolio you may want to trim a little bit let's say for example if oil prices come off and they come off durably and not just intraday maybe some of the oil sensitives you may want to shift some weight you know because the energy portfolio for us is like 22 23%. So maybe maybe take off 10% because you've made 30 40% in few names and get back to things which are still beaten down. Maybe selectively chemical names they are showing some signs of pick up. Selectively some names in for example somebody like a Reliance which hasn't done well because of the pressure on polymers recycling circular economy for example we have had a notification from the government on 40% mixing of recycled plastics you know in in PET bottles we have critical mineral mission in terms of recycling of of critical minerals and resources. So some of those names uh you know which are not as much in flavor and maybe in some cases out of flavor you may want to get in as I said provided uh you know see a durable reduction in both in energy prices and you know in terms of shipments from from Haros.

[00:06:57]>> Okay you know talking about the West Asia crisis one sector which seems to be sort of an indicator of what is happening there is real estate and sometimes tends to move in tandem with whatever is happening geopolitically.

[00:07:10]Um, a bit of a mixed bag in the Q4 numbers. Gurmid, what has been your takeaway?

[00:07:16]>> I'm a little worried Kapaza to be honest because if we are talking of negative hiring by IT services companies, >> this will have an impact on commercial space as well. I think I'm seeing a lot of startups struggling now to raise money round two, round three and series B, C and that they were bigger acquirer of commercial real estate and then it has a trickle down effect on discretionary consumption, higher end discretionary consumption. So especially the the mid luxury segment may get impacted. I think the mass segment will continue to do well. So we are in a very uncharted territory where probably you have a blue collar boom and a white collar slowdown. So you know if you see the biggest openings they are if you see job portals they are electricians, welders, commercial truck drivers, mechanical shop floor workers right and and maybe the bottom of the pyramid as well. So I think you probably need your consumption portfolio to reflect that.

[00:08:05]Be a little more towards the lower end of the consumption. you know look at something like Misho for example doing such well some of the good platform plays you saw FMCG businesses reporting good numbers at the at the lower end and maybe you know get a little slow on high-end discretionary which is let's say luxury real estate and others so that's my thought it's a little early to comment on that but that probably seems to be the case where you will have a bit of a blue collar boo >> gurm thank you so much for joining us it's always a pleasure to have you on and uh you know to hear the clarity that you Bring to everything that we ask you under the sun. Gi chhatta there.