Retail investors now the smart money, HNIs more prone to panic: Sandeep Tandon

Live Events
(You can now subscribe to our
(You can now subscribe to our ETMarkets WhatsApp channel
"I can say with good amount of confidence, at least till 2047 when demographic cycle peaks out in India, till then India PE multiple remains elevated for maybe you are talking about another 22 years or so, so it is more than 16 years I am saying that India multiple remain highest, which means earnings will expand but PE expansion is very important. So, as long PE remain elevated, the probability that you make good returns from the market," says Sandeep Tandon , CIO, Quant Mutual Fund Correct.It is very difficult to visualise exact 16 years. But if I have to look at India, there is a very interesting data, I will show you, like a lot of people forecast earnings, what will be the earnings for 5 years, 10 years perspective generally look at in numbers. We as Quant from a behaviour perspective we try to forecast the multiples. How we define multiple? Through perception, analytics. It is again interesting thesis which we have built, India perception has changed, something has dramatically changed in last few years. And if I have to say that India perception has changed and which means the PE multiple of Indian stock market will remain elevated from longer term perspective. I can say with good amount of confidence, at least till 2047 when demographic cycle peaks out in India, till then India PE multiple remains elevated for maybe you are talking about another 22 years or so, so it is more than 16 years I am saying that India multiple remain highest, which means earnings will expand but PE expansion is very important. So, as long PE remain elevated, the probability that you make good returns from the market.I think what has changed in last maybe, if I have to say in this Modi's decade, it is about same thing, India perception. The young people, not only their risk appetite is clearly visible, they believe they can demonstrate few things. The neglected people, they are coming back and that is a big force to reckon.Like, people talk about China is about their government, they are doing it. Here the entrepreneurship and we are seeing for the first time this level of entrepreneurship even from the institute, people wants to start their own companies not join the companies, so that is something has changed.And financial inclusion has played a very important role in this whole journey. I will say even 2020 remember as a covid issue, but something got changed in 2020. A lot of people were sitting at home, first time they analysed their investment and actually the expenses was not there, I think that was a change moment where people started focusing on investment and the wealth got created.Now, that that M2M gains which retail investor sitting is very meaningful and that is actually driving. So, I always say every bull run is driven by some leadership, this time leadership is retail and retail base is very large. So, if you can say maybe a decadal opportunity from a returns perspective, maybe we have seen just five years or so for the current decade.Sandeep Tandon: I always try to refer, this is some interesting work which we have done, when you talk about retail investor, it is actually jumbled up. Anything which is in non-institution is considered as retail actually. Actually, it is not. You have to differentiate that component from a HNI, family office, ultra-HNI and I always said that we can always see exactly at the bottom of the cycle, actually they are buyer, they are not getting panic. Who is getting panic? The people who are doing business. When I differentiate investor versus business, anybody who looks at their M2M on daily basis, for them this is the business and hence even market fall 10% if they believe that market can fall another 10%, they will exit, where retail investor is not.So, you have to differentiate the type of investor. Investor do not panic so easily. BUT somebody is doing business, which is the case for large family office, ultra-HNI, and HNIs, that segments panic. If I have to see, look at in last one year redemptions at our end, just do a redemption analysis, majority of the money if I have to say, if I say, maybe two-third of my redemption is coming from HNI and family office; only one-third comes and that also very interesting within one-third majority of redemption which coming from real retail investor is come from direct line not through regular route, they also need handholding.So, one way of looking at the turmoil or geopolitical volatility. Other way of looking at, look at we have seen India-Pakistan tension, we have seen trade war, we have seen now Middle East issue further escalating. Market has actually given you some positive returns. And the confidence is coming back. If you really look at September, October, and particularly January, February first quarter where some amount of capitulative move we saw in the market, I think that is changing and confidence is coming back and then market realised that India is the most safest place. In fact, three months back we made this call not only from India, India is a risk-on rally and globally is a risk-off.But what is very important is the decoupling process for India has begun. We believe India has now decoupled from global market, that is a cycle which we have been talking about in 2025 it begins, and we have seen now the decoupling process has begun.You look at the impact what happened in the US market, we are hardly any impact out here. And the turmoil which we are seeing, the first country used to get affected purely from a crude perspective. And if you really look at this time also, crude has also spiked very recently, it has only because of very recent phenomena we have seen the impact. Otherwise, crude also has been pretty stable.Very difficult to visualise in at this point in time, but only thing the way I look at from a regulations point of view, sebi has include the, we can talk about our industry, sif, the specialised investment fund, a new category. And obviously it is like we were the first to get that approval, but what is very important is that new segment is coming where it really help you from a diversification perspective.Like globally when you talk about hedge fund criteria, people trade or the prop desk or the high frequency algo, with route a short-term investment thesis will also gather momentum that is how you can make money in the short-term perspective also, how you better manage your returns also, how diversification through sif route also you can create better risk adjusted book.So, new instrument which is coming, which is not the case… Let us say some of these instrument was the part of only the HNI, family office, or the large ticket customer, I think now real, real retail customer will also be able to participate through SIF route and some more products will come.So, I am more excited that you will see innovation coming through product. Technology is obviously playing a very important role. Cost is coming down drastically.And what is very important when I talk about perception has changed, India, like people, retail investors are more convinced this time and I am saying they have become much more mature than as compared to what I have seen in 10, 20, 30 years.This time something is very different. Retail has not panic. If you really look at, they are not getting capitulated so easily. It is the more sophisticated investor they are panicking much earlier because they are more smart and they are more educated and leveraged. So, it is a phenomena something which we have to really respect the real retail investor is coming and they have patience now.Yes, I agree. So, five years let us say given the geopolitical turmoil, we also believe that beginning of the year say next five years also going to be challenging from a global perspective. Hence, I like to be more focused on the domestic economy. So, power is the theme. Power remains buy on dips. It is a decadal opportunity. So, if next five year, I think by 2032, power stocks should do well. All energy basket should do very well.Then, I will more bullish on the India infrastructure space, not just EPC companies, large infra plays whether ports, airports, even you can say EPC company, also large infra names which should be a biggest beneficiary because we have seen irrespective of state government also the infra spending has not cut down.I think we are in a massive investment phase in India, so that is a space which we like. And obviously if infra does well, then logically materials should also follow. So, I am saying first infra. And consumption as a theme is also coming back. The tax benefit which government has given, the RBI recent cuts will also boost the consumption.So, a lot of consumption stock which have been neglected territory or they were erstwhile admiring territory stock, those are the names one should look at. Hospitality space we still like, whether you talk about hotels, hospitals. So, those are the area. Services industry also.We want to see something new now. Like all those names which has been in admired territory for last few years may or may not give you that sort of returns going forward, so I will look for under ownership, I look for attractive valuation and research or I say uncovered.

Try Our AI Features

Explore what Daily8 AI can do for you:

Learn with AIFact CheckingText to SpeechAI Summary

Related Articles

Time of India

21 minutes ago

• Time of India

Why UK's F-35 still stranded in India, defence sources explain

Why UK's F-35 still stranded in India, defence sources explain Modi-Trump presser: US to sell F-35 stealth fighter jets, India ready for deeper cooperation US F-35 Jets: A game changer for IAF? All you need to know about fighter jets No formal acquisition for F-35 aircraft as yet: MEA spokesperson Randhir Jaiswal Air India Express flight makes emergency landing in Trichy after mid-air scare Aero India'25 to showcase aviation giants from IAF's CATS warrior, to US F-35, watch! MiG-29 fighter jet crashes near Agra after mid-air system glitch; pilot ejects to safety Uttarakhand airlift failure: Chopper falls off mid-air amidst an airlift by Indian army's MI-17 helicopter

Mint

34 minutes ago

• Mint

Four Indian pharma stocks that may be hit by US pharma tariff threat

Indian pharma stocks took a beating on Tuesday, 17 June, after US President Donald Trump said tariffs on pharmaceutical imports are coming 'very soon." His comments sent shockwaves across the market, dragging the Nifty Pharma index down by over 2% intraday. It was the worst-performing sector of the day. This isn't the first time Trump has hinted at such a move. He had dropped clues back in April, but this latest announcement has added urgency and concern. The Indian pharma industry, which relies heavily on exports to the US for generics and speciality drugs, is now facing concerns over potential revenue disruptions. Any disruption in trade or pricing could have a direct impact on revenues and margins. In this article, we take a look at five Indian pharmaceutical companies that could be the most affected by the proposed US tariffs. #1 Granules India Granules India has a presence across the pharmaceutical manufacturing value chain, including active pharmaceutical ingredients (APIs), pharmaceutical formulation intermediaries (PFIs) and finished dosages (FDs). It produces and supplies paracetamol, metformin, guaifenesin, and methocarbamol APIs. It has over 10 manufacturing facilities, approximately eight of which are located in India and two in the US. The company sells its products in global markets, including the United States of America, Canada, Latin America, Europe, Asia Pacific, and India. As per the FY24 annual report, 66% of Granules India's total revenue came from North America. This dependence has only deepened in recent quarters with the US market contributing 79% of revenue in the March 2025 quarter, according to the latest investor presentation. Data Source: Earnings Presentation FY25 and Q4 FY25 Given this significant exposure, any tariff-related cost increases could affect both the company's topline and margins. On 17 June 2025, executive director Priyanka Chigurupati said that the company is currently in the final stages of completing remediation work at its Gagillapur facility. It expects this process to wrap up in the next few months, after which a USFDA re-inspection is anticipated. Once this hurdle is cleared, Granules is aiming to launch 11 pending products in the US market, which were temporarily held back during the compliance phase. Production had been scaled down to prioritise remediation, but the company is now preparing to ramp up volumes again as operations stabilise. It's also working on its first major oncology product launch in the US, expected around FY28. To support its future growth strategy, the company is prepping its Genome Valley facility to meet upcoming USFDA and European audits. #2 Gland Pharma Gland Pharma has become a leader in generic injectables. Its presence spans 60 countries, including the US, Europe, Canada, and Australia. The company's business model primarily involves business-to-business, which contributes 98% of its revenue. It provides contract development, dossier compilation, and technology transfer services. The balance comes from business to consumer. Geographically, the company has a strong presence in the US, which contributes 54% of its revenue. Its revenue in the region has grown from ₹2,585 crore in FY22 to ₹3,037 crore in FY24. This makes the company vulnerable to tariffs. Recently, Gland Pharma received approval from the US Food and Drug Administration (US FDA) for Angiotensin II Acetate Injection. Since the company is the first to submit for exclusivity, it qualifies for 180 days of exclusivity for the generic drug. #3 Aurobindo Pharma Aurobindo Pharma has built a strong presence across more than 150 countries, manufacturing generic formulations, APIs, and injectables. It's the largest generic drug company in the US and ranks among the top 10 generic players in eight European countries. That's where the concern comes in. According to its FY24 annual report, half (48%) of Aurobindo's revenue comes from the US. Data Source: Aurobindo Pharma Annual Report 2023-24 As per the company's investor presentation in March 2025, it holds the top spot in the US in terms of oral solids prescription volume, commanding a 10.5% market share in the September 2024 quarter. So, when talk of new US tariffs on pharma imports hits the headlines, Aurobindo's heavy exposure naturally makes the stock vulnerable to a fall. On 16 June 2025, the company announced the incorporation of a new wholly owned subsidiary, Cresedemo Pharma LLC, in the US. This move aims to further strengthen its US pharma business. While the new entity signals Aurobindo's long-term commitment to the US market, the proposed tariffs could present near-term headwinds for the company. Looking ahead, Aurobindo is placing a big bet on the future of biosimilars. With 14 promising products currently in the pipeline, the company is eyeing a massive US$ 50 bilion+ market opportunity. If things go as planned, this could open up an exciting new growth path and offer some much-needed cushion against any potential policy shocks like the proposed US tariffs. Also Read: India seeks financial details of pharmaceutical marketing practices, industry caught in a bind #4 Dr Reddy's Laboratories Dr Reddy's Lab is one of India's largest pharmaceutical firms in the country. The company manufactures a wide range of pharmaceuticals with expertise spanning several therapeutic areas. Through its step-down subsidiary Aurigene Pharmaceutical Services Ltd (APSL), it's making strong strides in the CDMO space. APSL acts as a comprehensive Contract Research, Development, and Manufacturing Organization (CRO/CDMO), offering end-to-end solutions to global pharmaceutical and speciality companies. It has cGMP manufacturing facilities in the UK, Mexico, USA, and India, enabling it to serve a global clientele. Despite this global footprint, a large chunk of Dr Reddy's revenue still comes from the US. Also, the latest investor presentation of Q4FY25, shows 42% of the total revenue from the US market. This heavy dependence on the US leaves the company exposed to the potential impact of new tariffs. In response to increasing tariff speculation, the company has indicated a desire to consider local manufacturing in the US, through acquisitions. This will not only help reduce the risk of import duties but will also deepen its foot in one of its most important markets. Meanwhile, Dr Reddy focuses on maintaining its growth. The company plans to launch 15-20 new products in the US every year. Also Read: Dr. Reddy's focused on securing supply chains amid US tariff uncertainty Conclusion While the possibility of imports has rattled the sector, it's important to take a balanced view before making investment decisions. There's no denying that companies with high revenue exposure to the US, like Aurobindo Pharma, Granules India, and Dr Reddy's could face near-term challenges if such tariffs are implemented. Margins may come under pressure and growth plans might require changes. However, the long-term fundamentals of India's pharmaceutical industry remain strong. The government is actively supporting the sector through key initiatives such as the Production Linked Incentive (PLI) Scheme for Pharmaceuticals, Promotion of Bulk Drug Parks, Pharmaceutical Technology Upgradation Assistance Scheme (PTUAS), and the Pradhan Mantri Bhartiya Janaushadhi Pariyojana (PMBJP), which aims to make quality medicines accessible at affordable prices. Moreover, according to a recent EY-FICCI report, the Indian pharmaceutical market is poised to reach a value of around $130 billion by 2030, signalling strong growth potential. It's important to conduct thorough research on financials and corporate governance before making investment decisions, ensuring they align with your financial goals and risk tolerance. Happy Investing. Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. This article is syndicated from

Hans India

44 minutes ago

• Hans India

Strong demand, stable activity in economy

India's economic indicators are becoming more supportive of growth, according to the report released by Motilal Oswal Private Wealth (MOPW) on Friday. The report highlights that several positive trends are emerging on the domestic front, including higher GDP growth, easing inflation, and strong tax GDP grew by 7.4 per cent in the fourth quarter of FY25, which is the highest reading in the last four has remained below 4 per cent for four consecutive months, and GST collections have been rising steadily. These signs indicate strong demand and stable activity in the formal sector of the report also notes that India's policy environment is now moving in a unified direction. Fiscal, monetary, and regulatory policies are all aimed at maintaining growth increased tax exemption limits that came into effect from April 2025 are expected to improve disposable incomes and boost the same time, the government's capital expenditure continues to rise, supporting the investment the global front, the environment remains mixed. In April and May, markets faced worries over tariffs and geopolitical tensions. However, the situation improved with a delay in global tariff implementation and a ceasefire announcement between India and Pakistan. This improved global sentiment has helped global equity markets, with the MSCI World Index reaching record highs. Meanwhile, rising bond yields in Japan and China's shift towards gold show that global investors are moving away from US could become a concern as the US faces refinancing of $9 trillion in debt this a weaker Dollar Index could help emerging markets like India by attracting more foreign investments. In the Indian stock market, valuations have increased as earnings have not grown at the same Nifty-50's one-year forward valuation has risen above its long-term average, and mid and small-cap stocks continue to trade at a premium. This makes careful stock selection and active management more important for investors looking to generate higher returns, the report stated.