“We are not at the peak of a cycle. We are somewhere in the mid of a cycle with a very supportive base,” Garre said, adding that the broader economic momentum remains intact. “A conflict to the extent that we are seeing today is not going to be impacting the path from a point of view of where the economy is heading.”
He also noted that India’s strengthening geopolitical ties with major economies like the US and UK reduce the risk of escalation. “This sort of also limits, in my view, the extent to which this conflict can escalate,” Garre said.
On the India-UK free trade agreement (FTA), Garre said the deal may not be large in economic value but is still significant. “It might appear small in the scheme of things, given the quantum of trade at around $60 billion, but it is a good starting point,” he said. India, he added, has historically lagged in signing FTAs, and this deal signals intent and progress.
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In terms of earnings, Garre said the March quarter has reflected the delayed impact of economic softness earlier in the year. “There has been a pretty wide range in terms of performance within sectors,” he said, citing financials as an example where some companies performed strongly while others struggled.
He added that most of the earnings cuts seen recently were already anticipated. “The market already realised there would be a difference between what consensus expects versus reality because of forecasting errors,” Garre said. He expects earnings to pick up in the coming quarters.
Garre currently maintains a neutral stance on the pharma sector. After downgrading it earlier this year and witnessing a sharp correction, Bernstein moved the sector to equal weight, indicating a wait-and-watch approach.
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