Indian corporates are still wary of global macro headwinds and with the exception of certain pockets, there is very little indication of a pickup in private capital expenditure.

At a four-day institutional investor conference that concluded Thursday, Kotak Institutional Equities hosted over 800 entities consisting of global funds, foreign portfolio investors, domestic investors and close to 200 Indian companies.

“Private capital expenditure has not yet picked up,” said Pratik Gupta, Chief Executive Officer and co-head of institutional equities. The continued war in Ukraine, no indication of any pause in rate hikes in the US and at home and sluggish demand in some key sectors have put most corporates on a wait-and-watch mode. Describing the mood during the conference, Gupta said, “no one is extremely bullish or extremely bearish.”

However, there were some segments such as chemicals where expansion was taking place. Activity is being seen in companies and segments that are associated with or supplying to government undertakings such as the railways and defence. With the government’s continued thrust on infrastructure, there were positive commentaries from capital goods companies.

But makers of consumer discretionary products were not seeing a pickup in demand either among rural or urban customers, he added.

On a positive note, global funds and portfolio investors are looking to buy in the Indian markets on “major corrections”.

Local funds also reported getting steady inflows, though probably at a lower rate than earlier, though valuations were a concern with some sectors (and companies) seen as “over-owned” from an institutional standpoint.

Local investors were also worried about mid-caps as liquidity is not as much in abundance as previously. “They are worried about short-term underperformance,” Gupta said.

Some of the themes that were finding favour among the global investors were the financial services sector, particularly banks. Most of their exposure is to large caps where risk to net interest margins is not as negative as projected while loan growth is also strong, despite the higher cost of credit.

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