Maneesh Dangi, founder and chief executive officer of Mosaic Asset Management, has adjusted his outlook on Indian equities, moving from a bearish position to a neutral one. Dangi, who had maintained a cautious stance for roughly two-and-a-half years, now believes that investor pessimism surrounding the market is excessive and unwarranted, anticipating a better performance over the coming six to twelve months.
Shifting Sentiment Amidst Domestic Strengths
In a recent interaction, Dangi highlighted that the prevailing mood in Indian markets is weaker than justified. While not making an outright bullish call, he emphasized that India deserves a more optimistic outlook compared to the current sentiment. He projects that Indian equities could outperform their performance from the previous 12-18 months.
Several factors contribute to Dangi's more balanced view. He pointed to encouraging domestic capital expenditure (CapEx) growth, resilient economic fundamentals, and the fading of headwinds originating from the Middle East. India's balance sheet is also notably stronger than in previous periods, enabling the economy to absorb recent shocks, such as the oil crisis and earlier slowdown fears, with greater resilience than market expectations.
Global AI Race and India's Position
Despite the domestic strengths, Dangi noted a weakening in India's relative position against other major global economies. A significant disadvantage, in his view, is India's limited direct benefit from the global artificial intelligence (AI) investment cycle. He stressed that the AI-driven technological shift is poised to transform various sectors, including banking and wealth management, but India is not currently at the forefront of this change.
"India is not winning. US is winning. China is winning," Dangi stated, adding that countries like Japan, South Korea, and Taiwan are also significantly benefiting from the AI-led investment wave. Consequently, while India's internal macroeconomic situation remains robust, its global standing has deteriorated over the past 18 months in this specific context.
Future Outlook: CapEx and Spillover Effects
Looking ahead, Dangi sees potential opportunity in India's capital expenditure cycle. He expressed hope for a meaningful pickup in Indian CapEx, a development that equity strategists have long discussed but which has often fallen short of expectations on the ground. He anticipates that the substantial investment wave currently concentrated in the US around AI, data centers, and technology infrastructure could eventually spill over to India.
For now, Dangi expects the initial phase of AI-related investment to remain in the US due to its deep capital markets and established technology ecosystem. However, India could benefit from a trickle-down effect later. From an asset allocation perspective, he maintains a positive stance on the US, viewing it as a dominant player for the foreseeable future, even as other AI-exposed economies like Japan and South Korea face currency pressures relative to the US dollar.
Overall, Dangi's revised stance suggests a more nuanced picture for Indian investors: robust domestic fundamentals and a potential CapEx revival offer support, even as India works to catch up in the global AI race. This marks a notable shift from his previous bearish outlook to a more cautiously optimistic neutrality.