ET NEWS

Vinit Sambre, Head of Equities at DSP Mutual Fund, is betting on India’s consumption revival and GST-driven auto upcycle. His stock-picking lens is clear: focus on businesses with capital efficiency, long-term relevance, and exposure to shifting consumer behaviour. Within autos, he prefers two-wheelers, passenger vehicles, and ancillaries, while in consumption, he’s tilting towards consumer durables and consumer lending institutions.Edited excerpts from a chat:Given the underperformance of equity in last one year and sheer outperformance of gold and silver, multi-asset allocation funds are seeing higher interest these days. What has been your strategy at DSP Multi Asset Allocation Fund? Do you think precious metals will outperform stocks for the rest of 2025?We are living in a VUCA world—marked by volatility, uncertainty, complexity, and ambiguity—and this is unlikely to change anytime soon. Volatility and uncertainty may even intensify. At the same time, investors’ risk appetite and temperament vary widely. Not everyone can sit through prolonged periods of low equity returns.In such an environment, multi-asset allocation funds provide valuable diversification, making them highly relevant. Precious metals may have already seen much of their rally, but periods of uncertainty can still support their performance. While we expect equities to catch up toward the end of 2025, it is prudent not to take a one-dimensional view and instead maintain a diversified approach.As far as equity is concerned, do you think that most of the time correction is behind us and it is now time to be overweight equities and deploy spare cash?While it is difficult to precisely call the market bottom or the exact length of a consolidation phase, it appears that some more consolidation may continue until corporate earnings growth visibility improves. A large part of the time correction seems to be behind us, and India’s relative performance versus other emerging markets supports this view. As growth recovery becomes clearer, we believe the market will begin to look for a positive direction.GST is being seen as the biggest trigger for the market in 2025. Would you agree? And how has your portfolio changed since the new GST rates have been announced?I believe GST rationalisation is a much-needed and positive step, especially after a period of consumption stagnation. This move should gradually lift demand momentum, with clear benefits for sectors such as autos, consumer durables, and lending institutions. Our portfolios are well positioned for this shift, with meaningful exposure across autos, auto ancillaries, lenders, and a broad consumer basket, enabling us to participate in the potential upturn.Auto is being seen as the biggest sectoral winner of GST reforms. How would you play the auto cycle which in itself is quite broad with tractors, ancillaries, CVs and PVs players?We need to take a broader approach within autos—looking at OEMs and ancillaries that are diversified across product segments and well-positioned for multiple technologies, including EVs. At present, we are more constructive on two-wheelers and passenger vehicles, while the benefits for commercial vehicles are likely to play out more gradually. It is also worth noting that most auto OEM stocks have already seen a sharp run-up. For further upside, they will need to deliver growth meaningfully above expectations. Otherwise, the better way to capture the opportunity may be through auto ancillaries.IT has not only been the worst performing sector of 2025 but the outlook now looks more grim given the noise around the HIRE Bill. Is that a serious threat from a longer-term perspective? How much weightage are you giving to IT in your portfolios?We are currently at an equal weight position on the IT sector, supported by attractive valuations. While risks such as the proposed HIRE bill are creating noise and outcomes are hard to predict, we believe the structural importance of Indian IT to global companies provides a strong cushion.The sector is vital for India, contributing 7.3% of GDP and employing 5.8 million people. Globally, it is equally critical—60% of Fortune 500 companies have established GCCs (global captive centers) in India. With its deep pool of high-tech talent, India accounts for significant part of global sourcing market. Given the absence of comparable talent scale elsewhere, we see limited medium- to long-term risk to the Indian IT services industry.We will be having the Q2 earnings numbers flowing in a month from now. Do you think the September quarter would be the last of the single-digit earnings growth and we can expect double-digit growth from Q3 onwards?Yes, my assumption is also that the September quarter will mark the bottom for earnings growth. Beyond that, we expect a recovery supported by several factors: GST rationalisation, lower interest rates, income tax benefits, a favourable base, and improving demand as the festive season begins.Within the consumption basket, how would you go about picking winning stocks?The landscape is becoming increasingly tricky. We need to keep tracking wallet-share shifts as consumption patterns evolve. The younger generation, particularly millennials and Gen Z, are far more digital in their behaviour—using technology and online platforms extensively. Customer loyalties are also weaker, with consumers ready to experiment with new brands. The proliferation of online brands has further intensified competition.In this backdrop, we are focusing on businesses that remain relevant from a growth and capital efficiency perspective. Autos and select consumer durables—such as air conditioners and electronic manufacturing seems to be long term beneficiaries. We also see consumer lending institutions gaining indirectly, which makes us positive on the space.In addition, we are witnessing financialisation of savings, with rising interest in areas like capital markets & insurance, which we see as another important growth theme.Besides consumption and auto, which other sectors do you believe will lead the next leg of market growth, and what’s driving your conviction in them?Beyond consumption, we are seeing new opportunities emerge in the semiconductor value chain. Concrete activity is now visible, with companies showing intent to build both capacity and capability. While it remains early and uncertain which players will capture the most value, this space has the potential to become a meaningful investment opportunity over the next 3–4 years as domestic manufacturing gathers momentum.Another major theme is the energy transition. With climate challenges intensifying, large-scale investments are flowing into renewables, storage, green hydrogen, and grid modernisation. This evolving ecosystem is set to create strong, scalable businesses that could drive the next wave of growth in Indian markets.If you had Rs 10 lakh to invest in the market right now, how would you spread it across gold/silver, equities and debt?Equities would be 60%, precious commodities like gold & silver 25% and balance in debt.Lastly, what’s the one contrarian idea you’d back for the next 12 months?I believe the IT sector has been under pressure from the global geopolitical-driven slowdown. Over the next 12 months, we expect conditions to improve, giving companies better visibility on deal flows and growth. This makes the sector an attractive contrarian bet at current levels. Institutional holdings in IT are also relatively light, which adds to the potential for re-rating as sentiment turns.

Gold prices scaled a record peak on Tuesday, supported by a weaker dollar ahead of the Federal Reserve's policy meeting this week, where the central bank is widely expected to cut borrowing rates. Spot gold rose 0.1% to $3,680.17 per ounce as of 0109 GMT, after hitting a record high of $3,689.27 earlier in the session. U.S. gold futures for December delivery were flat at $3,718.80. The dollar traded near a 2-1/2-month low against the euro and close to a 10-month trough versus the risk-sensitive Aussie. A weaker greenback makes gold less expensive for other currency holders. U.S. President Donald Trump, in a social media post on Monday, called for Fed Chair Jerome Powell to enact a "bigger" cut to benchmark interest rates. Traders are pricing in a near-certain 25-basis-point (bps) rate cut at the end of the two-day meeting on September 17, with a small chance of a 50 bps reduction, per the CME FedWatch tool. Lower interest rates reduces the opportunity cost of holding non-yielding bullion. SPDR Gold Trust, the world's largest gold-backed exchange-traded fund (ETF), said its holdings rose 0.21% to 976.80 tonnes on Monday from 974.80 tonnes on Friday. Meanwhile, on Monday, a U.S. appeals court refused to allow Donald Trump to fire Fed Governor Lisa Cook - the latest step in a legal battle threatening the Fed's longstanding independence. Elsewhere, spot silver held steady at $42.71 per ounce, platinum eased 0.1% to $1,399.40, and palladium gained 0.4% to $1,188.59.

Mumbai: Lower-income borrowers, who typically depend on small-ticket loans, are increasingly moving away from microfinance institutions (MFIs) and turning to gold loans for immediate requirements. This shift is driven by soaring gold prices, lower gold loan rates and higher scrutiny by MFIs in sanctioning new loans. According to data from the Reserve Bank of India (RBI), loans against gold surged 122% year-on-year as of June while data from the Microfinance Industry Network show outstanding microfinance loans declined 16.5% during the same period."Many customers who previously relied on unsecured loans have found that route increasingly inaccessible," said Sanchay Sinha, chief general manager and head - retail at South Indian Bank. "With limited options for additional funding, they are now monetising their gold assets to meet financial needs." With an aim to reduce over-indebtedness and improve asset quality, the MFI industry had introduced three lender exposure-cap on a single borrower beginning this financial year. 123911080The number of such borrowers queuing up at more than three financiers fell to 3.1 million at the end of June from 5.7 million a year earlier, according to CRIF High Mark data. This shift in stance by MFI is the key driver to pledge family jewel, experts said.As of July 2025, outstanding loans against gold jewellery stood at ₹2.94 lakh crore, marking a 122% increase year-on-year. In comparison, unsecured credit card loans grew just 6% to ₹2.91 lakh crore, and personal loans rose 8% to ₹15.36 lakh crore, RBI data showed. Meanwhile, total assets under management (AUM) of MFIs fell to ₹1.34 lakh crore, down 16.5% from a year earlier.Gold prices have surged 44.14% in 2025, currently trading at ₹1,13,800 per 10 grams, up from ₹78,950 on December 31, 2024, according to Reuters.Shift in Gold Loan PerceptionExperts note a shift in the traditional perception of gold loans, which were once seen as a last resort during financial distress. Today, gold loans are increasingly viewed as a convenient and mainstream financial tool."We're seeing strong demand from western states like Gujarat and Maharashtra, as well as eastern regions such as Odisha," said Kamal Sabhlok, head - secured lending and microfinance at RBL Bank. "Cultural affinity for gold and higher household gold holdings are contributing to this trend. Gold loans are no longer stigma-driven, but are now seen as a practical financing option," he said.Sinha of South Indian Bank said growth rates in gold loans from the West, North, and East have outpaced those in southern India.Lower interest rates are a key factor driving this shift. Gold loans, being secured, typically carry interest rates between 10-15%, significantly lower than MFI loans, which often exceed 20%.

New Delhi: An increase in the US military activities in Bangladesh's strategically placed Chittagong area, located close to borders of India and Myanmar, has raised eyebrows as it may have implications beyond Bangladesh. A modern tactical transport aircraft of the US Air Force, a C-130J Super Hercules, which usually operates from Yokota Airbase in Japan, landed at the Shah Amanat International Airport in Chittagong on Sunday in what was the latest development involving the US military in the area. The landing of the aircraft in Chittagong is not a mere coincidence as reports have emerged of the role of extra-regional players in the area with interests in India's northeastern region and Myanmar, claimed sources familiar with the region. Myanmar rebels are being wooed by both the US and China.Ever since the Muhammad Yunus-led regime came to power, the US military has often been seen visiting the area, either for surveys or joint exercises. A few months back, US and Bangladesh held bilateral military exercises - Operation Pacific Angel-25 and Tiger Lightning-2025 in Chittagong. Sources informed that yet another US-Bangladesh joint exercise is being planned in the Chittagong area with a batch of US troops landing in the area last week. Last month, the body of a US Special Forces Command (Airborne) officer was found in a posh Dhaka hotel. The Bangladesh military has not been comfortable with the presence of US troops in the country apart from the joint exercise.There have been allegations about the US role in orchestrating anti-Hasina movement that led to ouster of the Bangladesh PM through "street revolution" in August 2024. Hasina had alleged that she was ousted for her refusal to hand over St Martin's Island to the US.123907506