BNP Paribas recently came out with a report which talks about disruption and what would be its India strategy from a 2025 perspective. In an interview to CNBC-TV18, Abhiram Eleswarapu, head of India equity research at BNP Paribas spoke about the findings of the report.

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Speaking about the auto industry, Eleswarapu said, “Demand worsened partly because of poor consumer sentiment, but also the cost of owning a vehicle has gone up in the past few months. It started off with higher insurance cost and now there are more costs that are going to be passed on because of regulatory or safety requirements, all the way up to 2023 when we are talking about emission norms. So, in the near term, we do not expect much of a recovery in autos. In fact, the outlook is clouded and therefore we remain cautious on the space baring a select few names.”

On the equity market, Eleswarapu said, “We have a Sensex target of 42,000 and that is up to the end of the year and that would call for about 8 percent odd upside. However, I do not think you will get this upside in a linear fashion.”

“There are several events that are lined up in the rest of the year. Firstly we have the election results that will come out. Then the talk will be about monsoon and all the estimations of today are for the monsoon to be average or below average. Then you have the new government that will probably lay down its policy framework and put it into action. Towards the end of the year though, we expect that the global slowdown will kind of accelerate," Eleswarapu added.

“What we are looking at is a very stock specific market, from here till the end of the year. It has got to be specific to areas that are reporting better revenue and earnings growth and probably also have valuations on their side,” Eleswarapu said.

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