India Stays Resilient, Keeps Shining

Yet again the market has given way and the Sensex has floated around the level of 56,000. Since August 2021 when the market had breached the level of 56,000, the Sensex has kept falling back to these levels despite having made three big attempts to summit 62,000. While this slack or frequent pullback may be frustrating for the bulls, it is healthy for the market in the long run. Practically, another three months and we would have completed about a year when the market has oscillated between the levels of 56,000 and 62,000. This consolidation phase tends to make these levels the base for any future rallies.

It also helps to set investors’ expectations back to reality and grounds them to the fact that quality stocks will give lasting returns in the end and that they should not get carried away in a runaway frenzy. These intermittent realisations are very healthy and serve as checkpoints during the lifecycle of an investor in his or her investment journey. No one better understands this than DSIJ with its 37 years of market observation and analysis. Meanwhile, yes, the early news from the result season is giving setbacks to the market. Plus, the developments on the international fronts too remain weak and a matter of concern.

Nonetheless, intrinsically, our country is very well-positioned and has the resilience to withstand these conditions and grow. Our brave stand on not taking any sides in the Russia-Ukraine conflict has got many a power like the US and the UK rushing to India to convince us. On the other hand, the confidence our current government enjoys of its people gives it the encouragement to compete with the developed countries unlike our neighbouring countries whose economies are falling like a house of cards. I believe the ‘India Shining’ story is very strong and we should be patient and keep our investments going.

Short-term hiccups like IMF cutting India’s GDP growth forecast by 80 bps to 8.2 per cent for FY23 are no doubt there but these setbacks will only strengthen our country’s long-term potential. In fact, the current weakness in the market is primarily led by index heavyweights like Infosys, HDFC and HDFC Bank that have fallen by 17 per cent, 20.83 per cent and 19.42 per cent, respectively. In the meantime, Mid-caps and small-caps, which are usually the weaklings during market volatility, have not fallen much at all. To understand the linkages and dynamics of inflation, interest rate and the equity market, we have come up with a cover story that digs into this subject deeper.

It explains in simple language how equity markets have performed during inflationary periods. I am sure the message in the cover story will inspire long-term investors to hold on to their top conviction stocks even during turbulent times. Further, this issue is a special one as we talk about Ashish Chauhan, Chairman and CEO, BSE Ltd. Indeed, Chauhan has been instrumental in shaping the financial markets in India. At DSIJ we are happy to introduce at length a personality who has done so much for the Indian equity markets and yet is known, talked about and understood by very few investors. I hope you all like and appreciate our coverage on one of the most talented financial minds in India.

This issue is special also because we are recognising the top PSU companies in India and celebrating their achievements. PSUs are mammoth organisations that play a key role in our country’s economy. Yet, many of us underestimate their strong contribution in strengthening the nation. This feature on awarding the best PSUs is our bit towards recognising the humungous work being done by some of these PSUs and, more importantly, to spur them further. And in parting I would like to point out that the IMF has downgraded its estimation of global growth for the next two years. However, India’s resilience will hold it in good stead and long-term investors should continue to use the dips to add and churn their portfolio with quality stocks. Stay strong, stay focused!

RAJESH V PADODE
Managing Director & Editor