Mr. Mahesh Patil
Chief Investment Officer, Aditya Birla Sun Life AMC Limited
Mr. Mahesh Patil is the Chief Investment Officer (CIO) of Aditya Birla Sun Life AMC Limited. As the CIO Mahesh oversees over INR 3 lakh crore of assets under management. With over thirty years of rich experience in fund and investment management, Mahesh leads the entire investment team, comprising fund managers and analysts. He personally manages funds such as Aditya Birla Sun Life Frontline Equity, Aditya Birla Sun Life Multi-Cap Fund, and Aditya Birla Sun Life Focused Equity.
Mahesh has been with Aditya Birla Sun Life AMC since October 2005. He was awarded the India CIO of the Year, Equity by Asia Asset Management in 2016 and 2018. He has been awarded Chairman’s Individual Award by The Aditya Birla group for being an Accomplished Leader in 2015.
He has previously worked at CMC Limited, Tata Economic Consultancy Services, Parag Parikh Financial Advisory Services Limited, Motilal Oswal Securities Limited and at Reliance Infocom Limited.
He holds a Bachelor’s Degree in Engineering from the University of Bombay and a Master’s degree in Management Studies from University of Bombay.
1. How would you rate the Union Budget 2023?
The Union Budget has scored high on credibility with key assumptions on nominal GDP growth, tax collections, and divestments looking realistic and achievable. Overall, the Budget has balanced growth and fiscal consolidation. It is realistic in assumptions, transparent and prioritizes macro stability.
2. In the budget, what stood out for you from a market perspective, was it the capex outlay which has been outlined or something else?
Being a pre-election year and the last full-fledged Budget of the current term of the government, the expectation was for the need of some fiscal boost, especially when economic recovery has been somewhat uneven. Amidst these challenges, the Budget has maintained a fine balance between fiscal consolidation while pushing for capex-led growth. Continuing with its earlier philosophy, the Union Budget had little in terms of outright populism. The broader push towards infrastructure, manufacturing, agriculture, and tax rationalization was consistent with the direction chosen over the last few years.
3. Can you identify now which sector would be the clear set of winners based on this year's Budget?
The Budget laid specific emphasis on capex, which has been increased by 33 percent YoY to Rs.10 trillion and capex to GDP ratio now stands at 3.3 percent, the highest since FY04. A large part of this capex outlay is for Railways and Roads. Overall, we believe the high capex spending will generally be positive for Infrastructure, Cap Goods, Metals, Cement and Banks.
4. Will anything change in the way you have approached your portfolio after looking at the Budget now? Will anything change in the way you manage money and the stocks you will choose from here?
The broader fund philosophy remains the same. Even prior to the Budget, we had been allocating a fair portion of our funds towards Infra, Cement and Banking sectors. The only negative in the Budget came for the Insurance sector which may affect the growth and margins for the companies operating in this segment, hence we have rebalanced our portfolios accordingly.
5. Do you think that now with consumption being spurred in this budget, the fear of inflation is looming large again?
We believe rationalization of tax slabs announced in the Budget will support consumption for low-income groups. This will lead to the much necessary demand revival in the lower income group segments which has seen some demand moderation over the last few quarters. Domestic demand should see continuous recovery with green shoots of rural revival, contraction of commodity prices and improvement in overall liquidity given government spending before elections. However, inflation is not a concern in India.
6. Which themes/sectors to focus on post budget and what are the key risks going forward?
Sectors which benefit from higher government capex such as Infrastructure, Cap Goods, Cement, and Metals are in focus. The slew of reforms in financial services viz. allocation to Pradhan Mantri Awas Yojana (PMAY), credit guarantee scheme for MSMEs, continuation of financial support for digital payments will be positive for this sector. Given the lack of any immediate fiscal boost for the rural segment, a lengthening of time frame on rural recovery and discretionary consumption needs to be monitored.