“Don’t Waste This Pause.” Amnish Aggarwal on RBI Rate Cuts and Where Smart Capital is Moving Now | PL Capital India Strategy
- 17th July 2025
- 05:40:00 PM
- 4 min read
Mumbai | July 17 – “Don’t waste this pause.” That’s Amnish Aggarwal’s message in the PL Capital India Strategy report for July 2025 as India’s equity markets drift after the RBI’s 100 bps rate cut and ₹2.5 lakh crore liquidity injection.
The headlines have moved on. Smart investors haven’t.
“A normal monsoon, tax relief worth ₹1 lakh crore, and now lower rates are setting the stage for a demand recovery. Investors should use this phase to align portfolios with businesses positioned to benefit from India’s medium-term growth drivers,” says Aggarwal, Head of Research at PL Capital.
So what does this shift in policy mean on the ground?
Liquidity Has Flipped. Credit Revival is Next.
The RBI’s CRR cut has moved system liquidity from tight to surplus. Deposit rates are easing, lending rates will follow, and EMIs are set to soften.
Lower rates and liquidity typically drive:
- Faster credit growth
- Improved affordability in housing and autos
- A constructive backdrop for quality businesses
“This is how credit cycles reset, and the strongest lenders are first to benefit,” Aggarwal notes.
- Banks: Quiet Compounding in MotionBanks stand to gain directly from lower funding costs and rising credit demand. PL Capital maintains its overweight stance on quality lenders, focusing on those with strong retail franchises and healthy asset quality.ICICI Bank remains a high-conviction pick, supported by stable margins and a robust lending engine.
Kotak Mahindra Bank is another key name, combining a clean book with disciplined growth in retail lending. - Housing: Rates Fall, Affordability Rises
Lower mortgage rates improve affordability, particularly when paired with a normal monsoon supporting rural incomes and tax relief aiding urban demand.PL Capital expects this environment to gradually revive housing demand, with potential positive spillovers for:- Housing finance companies
- Cement and building materials
- Paints and home improvement plays
- Autos and Discretionary: Festive Demand TailwindsThe festive calendar—Raksha Bandhan, Ganesh Chaturthi, Onam, Diwali—arrives as easing rates and softening inflation lift consumer sentiment. Two-wheeler and entry-level car demand could see a recovery, while demand for appliances and jewellery is expected to benefit during the seasonally strong months ahead.
India’s Macro Backdrop Remains Constructive
Globally, investors are navigating volatility and uneven growth. India, however, is aligning for its next upcycle:
- Inflation is cooling, allowing policy easing
- A normal monsoon is supporting rural cash flows
- Tax cuts are boosting disposable incomes
- The government’s capex push is real, not just a headline
“The policy mix is as good as it gets for India, and the market will reward businesses with earnings visibility and sector leadership,” Aggarwal says.
What Investors Should Do Now
The PL Capital India Strategy for July 2025 is clear:
- Focus on banks and NBFCs poised for a credit revival
- Track housing and building material sectors as rates ease
- Watch autos and discretionary consumption heading into the festive season
- Prioritise quality businesses over momentum chasing
Periods of quiet in the market often present the best opportunities for disciplined investors.
Bottom Line
The RBI has acted. Liquidity is improving. India’s policy backdrop is supportive. For investors, this pause is not a reason to stand still but a chance to align portfolios for what comes next.
At PL Capital, we combine deep research with macro insights to help investors capture India’s evolving opportunities. For a strategy aligned with India’s growth story, contact PL Capital’s India Strategy Desk today.
PL Capital
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.
