Shetty said Indian automobile companies have strong advantages that are not easy for global players to replicate. Factors such as pricing, fuel efficiency and after-sales service continue to favour domestic manufacturers, especially in mass-market and rural segments.
While premium car makers may see some impact, he does not expect a meaningful disruption for large listed players such as Mahindra & Mahindra and Tata Motors.
“I think it’s a reaction to the news than actual numbers,” Shetty said, adding that valuation concerns matter more than competitive threats. According to him, some auto stocks have seen sharp re-rating in recent years, and any meaningful correction could create buying opportunities.
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On the broader market, banks remain his strongest conviction. “The valueation that they are trading remains very attractive, something that we have not seen the last two decades,” Shetty said. He added that with the non-performing asset cycle improving, patient investors could see solid returns from the banking space.
Shetty sees relatively better long-term potential in services, particularly IT services, as easier labour mobility and market access could help Indian companies manage costs and expand presence in Europe.
On textiles, Shetty remains cautious. Despite the possibility of higher exports to Europe, he believes India lacks the manufacturing scale needed to compete effectively with countries like Bangladesh and Vietnam. Any benefit from the FTA, in his view, is likely to be marginal.
When it comes to metals, he downplayed fears around carbon-related taxes, noting that most Indian steel companies sell primarily in the domestic market. Local demand, driven by manufacturing and infrastructure, remains the key valuation driver.
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