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FY25 earnings projections seem achievable on the back of strong macros which are driving healthy topline growth. Risks to earnings could be some margin compression coming from rising oil and commodity prices.
Gautam is a unique manager in that he manages an infrastructure fund as well as a consumption fund – two themes that are on opposite sides of the market spectrum. He believes both themes have strong runways. Infra however tends to be higher beta and can potentially deliver stronger growth albeit with more volatility compared to consumption.
Gautam is more positive on consumer discretionary than consumer staples. He expects a few more quarters for staples’ demand to revive.
HSBC MF’s consumption fund is off to a strong start in its initial quarters, topping the performance tables, on the back of overweight positions in real estate, hospitals and non-lending financial services which have all played out very well.
His infrastructure fund has struggled in the last few quarters as his underweight position in energy stocks dragged down fund performance. He remains underweight energy and prefers to continue his overweight position in capital goods – which he sees as a more sustainable story backed by strong earnings visibility.
Infrastructure & Consumption themes are complementary to each other in a growing economy. Point well made & explained.
