Market veteran Ajay Srivastava of Dimensions Corporate says Indian investors often misread the state of the global economy, especially that of the United States. In an interview with ET Now, he noted that the American economy is performing well, with equity indices at record levels, unemployment near historic lows, and major firms generating substantial wealth. He added that most nations would welcome the position currently held by the US and urged India to focus on its own challenges rather than assessing foreign economies.
Srivastava observed that the world economy has remained steady despite tensions in West Asia. Developed countries have spread risk across semiconductors, technology and advanced manufacturing, lowering reliance on single sectors. India still needs to build comparable strengths and improve competitiveness. He stressed the need to separate economic analysis from political views to support sustained growth.
On artificial intelligence, he said investors should not overlook the sector despite high valuations. Leading AI firms hold strong advantages and are expected to create lasting value. While India is not at the forefront of core AI development, it can benefit greatly as a large-scale user of the technology. Businesses across sectors can raise productivity by adopting AI tools, opening opportunities for local companies in deployment and integration.
Srivastava also rejected the idea that US market gains rest solely on AI stocks. Industrial, consumer and defence companies have posted solid results, pointing to broader economic strength. Among Indian sectors, he sees banking gaining most from AI through better efficiency, lower costs and higher profits. Automation of branch work, customer service and call centres could improve margins significantly.
He remains selective on banks, expressing doubts about some large traditional lenders that have delivered modest returns despite strong positions. Recent rate cuts may have limited effect, with structural changes and technology use likely to matter more. Public-sector banks trade at low valuations that he finds puzzling, yet downside risk appears contained. He expects certain private banks with strong ownership to perform better.
Regarding expected credit loss rules, he believes any impact will be gradual and manageable. Investors should watch interest rates, growth, efficiency and competition instead. Finally, he criticised the heavy domestic focus of most Indian portfolios and limited exposure to overseas assets.
