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Ganeshram Jayaraman of Avendus Spark discusses the portfolio construct with a focus on defensives and industrials. He is cautious on the macro outlook, expects volume growth to be the key driver, and highlights the evolving consumption patterns in the rural economy. PSU banks and sectors dependent on government capex may face challenges.
India Incs appetite to spend on capital projects is high despite some concerns around elevated geopolitical tensions impacting demand in the coming months.
The capex tracker index of institutional research firm Avendus Spark shows a reading of 342 in June 2023 - the highest in more than 12 years. The index has been consistently rising since December 2020 - when it hit a low of 147. The index assigns weights to private capex announcement (35%), aggregate new order (15%), import of capital goods (10%), and central government capex and state capex (20% each).
“Weakening consumption and rising personal loans are a concern. Where is the money going? Is it being used to fund debt servicing because unsecured loans are growing at almost 30%. We are asking some fundamental questions on this dichotomy between consumption and credit growth. Maybe 20-25% of credit growth is going into the travel tourism angle.”
According to bulk deals data available with the exchanges, Infinite trade has offloaded 4.2 crore shares in the company at a weighted average price of Rs 920 apiece. Adani Green is a majority promoter-owned company with 56.2% stake, while public shareholders own the rest of 43.7%. Among the public shareholders, mutual funds have a negligible 0.11%, while foreign investors own a big chunk of 16.14%