Post tariff tantrum, where could we see some positive surprises in Q1? Pashupati Advani explains

Pashupati Advani, Founder, Global Foray, says we will see positive surprises in companies which have a lower tariff than people expect. The second thing that will happen is if there is any kind of misbalancing and arbitrage opportunity in the tariffs, companies that are able to take advantage of that will be winners. Whoever moves fast will win in the game.

Will Donald Trump make it zero for everybody by announcing higher tariffs?
Pashupati Advani: I think the world is going to gang up against America, but who knows? I mean, he wants his pound of flesh. He is going to succeed with some countries. He is not going to succeed in others. The Canadians have already started putting all sorts of nonsense against the US. So, let us see and that is really the backyard.

Just analysing what today could transpire as, do you sense there could be a very quick reaction from the equity market? Is something as large as country-wise tariff implementation going to take time to digest for equity markets and for the dollar to find its feet?
Pashupati Advani: There has been uncertainty based on where the tariffs are coming in and on what they are coming. Once they announce what they want to charge specifically, whether it is companies, countries, or sectors. It is a big blob right now. The reality of the matter is what we are going to know and then we are going to react and depending on if India is better than Bangladesh or Vietnam, we will find out and that will make the markets go forward or backward. The US markets are in for a bit of a negative simply because tariffs means higher prices and the US looks like it is kind of going into recession. It will take a few months, but it does not look very good over there in their economy.

When all this dust on tariffs settles down, it is going to be back to basics and soon enough, the earning season will play out. Where in Q1 could you see some positive surprises?
Pashupati Advani: You will see positive surprises on companies which have a lower tariff than people expect, that is for sure and the second thing that will happen is that if there is any kind of a misbalancing and any kind of arbitrage opportunity in tariffs, those companies that are able to take advantage of that will be winners. Till you get the rates and till you get it in black and white, you do not know what to do. So, it is going to be whoever moves fast will win in the game.

How are you seeing the entire EV play or rather EV transition play out for the SUV market and do you think that M&M would continue to win the battle here?
Pashupati Advani: Out of all the Indian players, M&M has shown the most promise so far. However, MG is coming in pretty strong. BYD, which is the strongest EV player in the world, will benefit from the lower tariffs on EVs and the EV market is going to get shaken up. So, I would not be jumping in so quickly and the real challenge in EV is the EV infrastructure where we are pretty sadly behind. We could have 10 million EVs on the road, but we would not have enough chargers. Those are the challenges. It is promise versus performance. Let us see how that goes.

Shree Cement, not the best cement stock in terms of capacity, scale, or size is up 15 times in 15 years, Ambuja, ACC during that same time when India boomed, has only doubled. Which is the next Shree Cement?
Pashupati Advani: I think a new stock will come out in a new sector. Maybe it will be nuclear energy, maybe it will be something else but it will be something new.

Tell us, what is the next Shree Cement? Any stock that comes to your mind from the existing pool? From the existing lot, what do you think?
Pashupati Advani: I think it has to be some kind of food distribution stock, maybe Godrej Consumer or something like that because our population does not seem to be slowing down and the move is going to be from the unorganised to the organised sector in food because of all the standards. It has to be a stock somewhere in the food sector, maybe Levers. But Levers is already high, so maybe Godrej Consumer. I do not know. This is a wild guess. And I have not done anything in it so far. But you gave me an interesting idea.