In comparison to the rest of the globe, India's business cycle is in a stronger position thanks to reforms, a favourable demographic, and corporate earnings. According to Harish Krishnan of Kotak Mahindra Asset Management Company in an interview with Moneycontrol, sentiment is favourable positioned.
With more than ten years of expertise in equities research and fund management, the senior executive VP and fund manager (equity) at Kotak Mahindra AMC oversees large-cap, thematic equity, and dynamic funds.
According to him, reasonably robust fundamentals are counterbalanced by relatively high valuations, which suggests that short-term expectations for the momentum of the equity market should be moderated. Edited passages:
Are you concerned about declining foreign exchange reserves in light of the weak rupee and high oil prices?
Due to the strength of the dollar as well as other factors, our sensitivity to the outside world has increased.the reduction in our total reserves. Given the enormous reserve building done in 2020–21, we are better off than we were in 2013, but over the past nine months, a sizable percentage of this improvement has been utilised. Therefore, the rupee will be affected by any additional strengthening of the dollar and any decrease in reserves. your estimations, and how would you interpret management commentary?
After the Covid epidemic, consumption, particularly at the base of the pyramid, is still struggling, but the production and investment cycles are still generally strong. While there have been notable successes and failures in various industries, overall, consensus profit projections have been modestly revised down.
Will the current equities market surge continue, or will it falter in the future?next weeks?
We really aren't very good at forecasting short-term market fluctuations. The opinion towards Indian equities is unquestionably positive, driven by economic changes in recent years, favourable demographics, and cleaned-up balance sheets of Corporate India. Naturally, the difficulties stem more from the backdrop of high valuations, particularly given that the majority of other asset classes globally are valued below their 25-year average.
Also read: Despite global challenges, Indian markets have exhibited remarkable resilience: Michael Wood
We therefore believe that the relatively strong prices are counterbalancing the advantages of relatively robust fundamentals, which suggests moderating expectations for the near term.
What home topics have you got a lot of confidence in?
We are playing the same way and are optimistic about the domestic business cycle.
a) Increasing investment in sectors of the economy like manufacturing,Cement, major banks, and capital goods are examples of this subject.
b) Revenge consumption among aspiring Indians is projected to improve economic trends for industries like retail, travel, auto, and entertainment that were negatively impacted by the pandemic.
Will India experience strong economic growth over the next ten years?
The longer-term economic outlook for our country remains positive. Young demographics, relatively lower corporate and household leverage, and a plethora of reforms launched over the past several years by different governments bode favourably for the long term.
However, we must also accept that the world's conditions have deteriorated, making it likely that external demand will be difficult and have an adverse effect on overall growth.
Disclaimer: The opinions and investment advice provided by professionals on Moneycontrol.com are their own.
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