Mugunthan Siva on ausbiz with Andrew Geoghegan discussing the recent pullback in Indian equities and the outlook for 2025.
Key points:
Significant market decline and investors’ shift toward earnings certainty.
Strategic focus on tech and pharma sectors.
India’s minimal trade impact with US amid new partnership opportunities and economic growth forecasts.
Mugunthan Siva from India Avenue Investment Management notes a significant 12% market decline since mid-September, attributing this to slower earnings post-Covid. While previous high valuations now favour US markets, investors seek earnings certainty in a narrower set of companies.
Recently, India Avenue’s strategy has shifted to focus on quality, sustainable earnings, emphasising sectors like tech and pharma. These industries earn significant revenue offshore, particularly from the US and Europe, benefiting from structural tailwinds like pharma patents, and offer diversity in revenue streams.
Mugunthan highlights that India’s trade with the US is minimal, with more potential opportunities in forming new partnerships amidst global trade tensions. Despite risks like inflation and mismanagement, he expects India to surpass Germany and Japan’s economies by the decade’s end, driven by a large, young workforce
