NewKerala.com

Rupee's Worst Depreciation May Be Over, Says HDFC Securities Report

HDFC Securities' 'The Big Review' report indicates the worst phase of the rupee's depreciation may be behind us. The firm praised the RBI's balanced 'wait and watch' approach on interest rates, considering global geopolitical instability. While real GDP growth is expected to remain in the 6-7% range, domestic investment flows are projected to stay robust. However, the ongoing war situation is identified as a key variable that could introduce market volatility.

Key Points: HDFC Securities: Rupee Depreciation Easing, RBI Approach Balanced

  • Rupee depreciation pressure easing
  • RBI's status quo seen as prudent
  • Real GDP growth seen at 6-7%
  • Domestic investment flows to remain strong
  • Geopolitical war is key volatility variable
2 min read

Worst of rupee depreciation may be over, says HDFC Securities; lauds RBI's balanced approach

HDFC Securities report suggests the worst of rupee depreciation is over, lauds RBI's balanced policy, and forecasts 6-7% real GDP growth for India.

"The worst of the rupee depreciation may be over. - Varun Lohchab, HDFC Securities"

Mumbai, April 8

HDFC Securities on Wednesday released its 'The Big Review' report, stating that India's real GDP growth is expected to remain at 6-7 per cent, while nominal growth is expected to improve soon.

Speaking at the event in Mumbai's St. Regis, Varun Lohchab, Chief Research Officer-Equities at HDFC Securities, said, "While the real GDP growth is expected to remain at 6-7 per cent, nominal growth will be better due to inflation improvements."

He added that despite Foreign Institutional Investor (FII) flows currently being negative, they are expected to improve in FY27 compared to the previous two years.

Lohchab also highlighted the currency situation, suggesting that the worst of the rupee depreciation may be over.

Regarding Foreign Direct Investments (FDIs), he noted that huge outflows are unlikely in the coming months and that triggers for a reversal are awaited. He stated that absolute and relative earnings growth in FY27 is not strong and that valuation premiums have now become long-term premiums.

Dhiraj Relli, Managing Director and CEO of HDFC Securities, believes domestic investment flows into India are expected to remain strong, driven by direct investment opportunities and a decrease in FII selling pressure.

He said, "The ongoing war situation is identified as a key variable that could introduce volatility, but a resolution is expected to lead to a significant upside for the Indian markets in the future."

He expressed optimism for FY27, anticipating a positive performance for the Indian market.

Answering a question from ANI regarding the RBI MPC minutes, Relli said, "The RBI's monetary policy announcements, which predict 6.9% GDP growth for FY27, are seen as reasonable and constructive, with no immediate interest rate hikes anticipated."

Speaking along similar lines, Unmesh Sharma, Head of Institutional Equities at HDFC Securities, said, "The RBI's decision to maintain the status quo on repo rates is seen as a prudent 'wait and watch' approach, given the geopolitical instability and uncertainty surrounding the conflict."

He added that HDFC Securities estimates GDP growth could be slightly lower than the RBI's projection, by approximately 10-20 basis points. He advised investors to buy stocks slowly, continue monitoring daily data, and opt for a long-term investment approach.

Earlier in the day, the RBI maintained the 'status quo' on the repo rate at 5.25% in its first Monetary Policy Committee meeting for FY26-27.

- ANI

Share this article:

Reader Comments

P
Priya S
Good to hear a positive outlook, but I'm a bit skeptical. They say "worst may be over," but for middle-class families, even small fluctuations in the rupee make petrol, cooking oil, and electronics more expensive. Hope the RBI's wait-and-watch yields results.
V
Vikram M
The focus on domestic investment flows is key. With strong DII support, our markets can be less dependent on fickle FII money. This is a sign of a maturing economy. Long-term SIP in good stocks is always the way to go.
R
Rohit P
"Buy stocks slowly" is solid advice for retail investors like me. The geopolitical situation is worrying, but if a resolution comes, it could be a big boost. Fingers crossed for a stable rupee and lower inflation! 📈
S
Sarah B
As someone who follows both Indian and global markets, the RBI's prudence is commendable. Holding rates steady provides much-needed stability. The 6-7% real GDP growth projection is impressive compared to many developed nations right now.
K
Karthik V
While the report is optimistic, we must not ignore the "key variable" of the war situation. Global volatility hits our markets hard. The government and RBI need to keep building strong forex reserves as a buffer. Jai Hind.

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

Leave a Comment

Minimum 50 characters 0/50