SAMCO Securities Head of Research Sheth on RBI Policy
This story was originally published at 13:13 IST on 7 October 2026
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NEW DELHI – Apurva Sheth, head of market perspectives and research at SAMCO Securities, said the following on the Reserve Bank of India's fourth bi-monthly monetary policy statement for the financial year 2026-27 (Apr-Mar) detailed Wednesday:
India's central bank announced a rate hike of 25 basis points and moved the interest rates from 5.25% to 5.50%. RBI has joined the rate hike camp of central bankers which is weighing heavy. Thirty-one out of 42 central bankers have hiked interest rates across the world in their most recent policy announcement. India was not the first one and certainly won't be the last. Inflation worries are keeping central bankers awake. Rising debt in the developed nations is forcing central banks to bridge their deficit by increasing rates. After a 40-year downtrend from 1980 to 2020, the global cost of capital is resetting, and India cannot stay insulated with crude (oil) above $100 and the rupee near 96 (to a dollar).
For the economy, this is a shift from growth-first to stability-first. Repo-linked EMIs (equated monthly instalments) rise within a quarter, the rupee gets a floor, and government borrowing costs climb, just as the Centre leans on capex (capital expenditure). For companies, the hike redistributes pain. Leveraged real estate, infrastructure, and debt-heavy mid-caps see margins squeezed, and EMI-driven demand in housing, autos (automobiles) and (consumer) durables slows. CASA-rich (current account savings account-rich) banks gain as loans re-price before deposits; wholesale-funded NBFCs (non-banking financial companies) do not. Net-cash exporters in IT (information technology) and pharma benefit twice over. For markets, expect a valuation reset, not an earnings collapse, with richly valued small- and mid-caps most exposed. End
Compiled by Devanshu Singla
Filed by Rajeev Pai
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