HSBC MF CIO sees discretionary demand and credit growth rebounding by year-end

Venugopal Manghat, CIO–Equity at HSBC Mutual Fund, which manages over $14 billion in assets, said India’s economy could outperform the current 6.5% gross domestic product (GDP) growth estimate.

The second half of last year was marked by slower growth as government capex dipped and liquidity tightened. But recent data points to a turnaround, with a strong rebound in government spending seen in March, April, and May, Manghat said.

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He said easing regulations and interest rate cuts are also helping improve conditions for consumers and borrowers. HSBC MF expects capex and investment-led sectors driving growth for now.

Credit growth could recover to 12–13%, while discretionary demand is likely to pick up in the last quarter of the calendar year, , supported by tax incentives, better liquidity, and easing regulations on lending.

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In the IT sector, Manghat acknowledged that global uncertainties had weighed on expectations, especially due to fears of a slowdown in the US and pressures on discretionary spending. However, he pointed out that demand hasn’t collapsed.

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“BFSI is still holding up… manufacturing and retail are slower, but we might see some better-than-expected results,” he said, cautioning that company commentary in the coming earnings season will be key to understanding future trends.

For the full interview, watch the accompanying video

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