The South market is expected to contribute 30 per cent of the targeted AUM of 1 lakh crore in five years, says Rajesh Bhatia, Chief Investment Officer, ITI Mutual Fund.
Bhatia considers the South a key market, calling it well-informed, particularly in its understanding of financial products. A significant portion of its assets comes from South, he said.
Looking ahead, Bhatia acknowledges market fluctuations, noting, “Our AUM is fluctuating in the₹9,500 crore to₹10,000 crore range.” He expects certain sectors to perform well, adding, “If the US economy does well, IT will benefit, given its dependence on the US market. Pharmaceuticals will also continue to grow, despite some valuation challenges.”
Beyond traditional sectors, he sees potential indigital-driven businesses in sectors such as digital commerce, quick commerce, insurance aggregators, and payment companies could perform extremely well in the coming years.
Headwinds
Bhatia acknowledged the economic slowdown, and the limited fiscal and monetary flexibility which requires identifying new drivers of growth. He pointed to proposed US tariffs as a potential concern, noting that they could strengthen the dollar trade and add further uncertainties to global markets.
Despite these challenges, he remained optimistic about India’s long-term growth potential, citing both international investor sentiment and domestic economic indicators.
However, he differentiates between short-term cyclical challenges and long-term structural stability, explaining, “The current concerns are more cyclical than structural. Consumption has not picked up as expected, and fiscal consolidation post-Covid is underway. During the pandemic, our fiscal deficit exceeded 9 per cent, and now we are working towards bringing it down to 4.4 per cent by FY26. As government spending decreases, it has a dampening effect on the economy, he said.