Even as the negative impact brought forth by policy reforms of GST & demonetisation continue to be under scrutiny, Gautam Chhaochharia of UBS says that they often get over-exaggerated.
Even as the negative impact brought forth by policy reforms of GST & demonetisation continue to be under scrutiny, Gautam Chhaochharia of UBS says that they often get over-exaggerated. In an interview to ET Now, Gautam Chhaochharia, Head of India Research, UBS said, “GST, demonetisation get over exaggerated in terms of their impact on the broad economy and markets in our view because while they do have some impact on the supply chain and therefore the reported wholesale numbers, but the underlying retail level impact is arguably going to be limited. This is because GST or demonetisation may not cause any permanent dislocation or damage of demand unless and until they cause broad-based job losses.”
The expert reveals that his surveys do not indicate any disruption from the reforms. “As per our anecdotal checks etc. and even one of the surveys we had done recently using evidence lab does not look like any broad-based disruptions here. There are anecdotal stories here and there which get amplified but there does not seem to be any broad-based disruption per se from GST.”
In terms of his sectoral expectations after the GST Council meeting Gautam Chhaochharia said that the jewellery sector may see buoyancy. “Last week’s tweaks are in the near-term, positive for the jewellery sector. Even our evidence slabs survey suggested that within the jewellery segment, the preference towards brand and move towards brand including within, say, a category of marriage jewellery is happening quite fast and that is the margin that could see a positive surprise versus what we were baking in earlier,” he told in the same interview.
Last week, in its 22nd GST Council Meeting, the government scrapped GST on gems and jewellery stating that PAN card will no longer be mandatory on the purchase of jewellery for over Rs 50,000. Offering further respite to jewellers, the meeting further concluded that any entity dealing in gems, jewellery and other high-value goods that has a turnover of Rs 2 crore or more in a financial year will not be covered under PMLA (Prevention of Money Laundering Act, 2002).
Gautam Chhaochharia said that UBS is currently neutral on pharma. “On pharma, you should be tactically overweight and rather than the sector as a whole, you could look at names selectively. We remain neutral on pharma but we do like a couple of names there,” he told the channel.