India’s PMS Managers Navigate Uncertainty Amid Looming U.S. Tariffs

Investments Indian Investments

Posted by NewAdmin on 2025-04-02 08:37:44 |

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India’s portfolio management services (PMS) managers are preparing for potential challenges as the U.S. tariff deadline on April 2 approaches. This has prompted many fund managers to reevaluate their investment strategies amid increasing volatility. The recent rally in small- and mid-cap stocks, following one of the steepest corrections since the pandemic, is showing signs of losing momentum, adding to the prevailing nervousness in the markets. To navigate this uncertain period, PMS managers are focusing on domestic businesses and exporters with strong competitive advantages that can withstand tariff-related pressures.

Marcellus Investment, led by Pramod Gubbi, maintains a stock-specific approach rather than speculating on broader market movements. Gubbi focuses on analyzing individual stocks, especially in the context of India’s cyclical slowdown. He remains cautious about the slowdown in government-led capital expenditure, which could impact sectors dependent on public spending. While acknowledging near-term challenges in the IT sector due to delayed discretionary spending, Gubbi continues to favor strong business models with high cash generation. Marcellus has selectively invested in large-cap names like HCL Tech and L&T, along with a few mid-caps, while maintaining an underweight stance overall.

Similarly, Umesh Agrawal of 360 ONE Wealth is adopting a defensive strategy, focusing on sectors driven by domestic demand rather than aggressively accumulating positions. He sees potential in healthcare and consumer electronics manufacturing, sectors less affected by global trade disruptions. Agrawal is also exploring opportunities in the circular economy and precision engineering, emphasizing profitability and low debt.

Kashyap Javeri of Emkay Investment Managers views the tariff risks as less severe than anticipated. He believes that auto ancillaries and pharma CDMOs are resilient to trade pressures due to the inelastic nature of supply chains, particularly in the auto sector. Javeri is cautiously accumulating high-quality mid-cap stocks that have undergone sharp corrections, seeing potential for long-term gains.

Prateek Agrawal of Motilal Oswal focuses on sectors aligned with India’s economic growth rather than those heavily reliant on exports. His investment strategy targets healthcare, airlines, renewables, and defense, reflecting a preference for domestic-facing sectors. This aligns with Motilal Oswal’s philosophy of prioritizing quality, growth, longevity, and price.

Satwik Jain of Generational Capital is capitalizing on India’s consumption growth by backing strong consumer brands like V2 Retail, Ethos, and Varun Beverages. He believes that in a consumption-driven market like India, focusing on well-established brands is a prudent strategy. Jain is also keen on domestic pharma brands and tech companies with niche focus areas.

At Prudent Equity, Aman Soni is prioritizing infrastructure and banking stocks while maintaining a cautious approach towards deploying fresh capital amid tariff uncertainties. The firm has consciously avoided sectors like IT, autos, and chemicals, keeping around 30 percent in cash to seize new opportunities. Diwakar Rana of Prudent Equity also highlights the risk posed by cheaper Chinese imports, which could disrupt local markets as China’s manufacturing output remains robust despite low domestic consumption.

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