“Those challenges are the threat from AI, which would impact the job growth, particularly for the tech sector. It is the hyper competition you see in some of these spaces which is impacting the profit pools, etc. So one’s going to be mindful,” he added.
India’s recent market pullback, he said, wasn’t driven by negative sentiment. Structural reasons like the Reserve Bank of India’s (RBI) $70–80 billion intervention to defend the rupee and reduced government capex led to tight domestic liquidity. With those pressures easing, Chadha said, “India’s clearly bottomed,” a view his firm held back in mid-February.
One of the key positives for India is the global push to diversify manufacturing away from China. However, Chadha said these benefits will play out over the medium term. “You can talk about decoupling or moving away from China, but this cannot be done overnight,” he said, citing how supply chains built over 15 years can’t be undone quickly.
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Among sectors, he sees promise in discretionary consumption, supported by government tax cuts, pre-election spending, and benefits from commissions like the HP Commission. He is cautious on defence and industrial mid- and small-caps, where valuations appear stretched.
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He believes India’s hospital sector is a long-term growth opportunity. The government has recognised that the private sector has the resources to build capacity, especially after the COVID-19 experience.
Though largely an equities-focused investor, Chadha also supports gold as a strategic asset. In a world of de-globalisation and policy uncertainty, gold is a “good hedge,” especially amid ongoing US dollar weakness.
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He also stated about recession risks in the US, particularly if trade tensions with China persist. Stock shortages and economic strain could follow, making a US-China trade deal crucial. “Markets would cheer a deal” if tariffs settle around 25–40%, he said. Without such a resolution, global risk sentiment—and by extension, flows into India—could suffer.
For the entire interview, watch the accompanying video
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