Internet Sector Poised to Grow Three Times Faster Than GDP: Murarka

Fast Summary

• Pankaj Murarka, CIO of Renaissance Investment managers, predicts tariffs will have a moderate impact on the Indian economy.
• India’s consumption remains insulated due to it’s domestic-oriented nature despite post-Covid economic slowdown.
• tariffs are seen as transitory and likely tied to negotiation tactics, with sectors like textiles and gems/jewelry facing higher exposure.
• Economic growth for this year is forecasted at 6.2%-6.3%, slightly lower than last year’s 6.5%. A 12-13% CAGR return over the next two to three years is expected for markets in a larger bull trend.
• Recovery in second-half earnings growth is anticipated due to fiscal/monetary stimulus measures like tax cuts and RBI rate cuts.
• Financials and consumer sectors are projected to lead this recovery, with internet companies continuing to exhibit strong growth at double or triple nominal GDP rates.

Indian Opinion Analysis
Tariffs present a manageable challenge for India’s economy according to Murarka’s assessment, highlighting resilience especially in domestic consumption-driven areas like retail markets unaffected by global trade tensions. Though, export-heavy industries such as textiles may face pressure if elevated tariffs persist longer than anticipated negotiations allow. Encouragingly, fiscal policies combined with monetary easing create conditions conducive for improved earnings and financial performance later this year.

India’s gradual earnings recovery underscores broader economic stability but highlights ongoing structural factors slowing momentum post-Covid against past benchmarks of faster GDP expansion observed within comparable emerging economies globally.Internet sector-driven self-reliantly among positives maximizable amid digital ecosystem transformation further accelerated regionally shaping future frontier drivers

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