The market analyst said that the investment cycle in India is currently turning around and the corporate houses are changing their business models.
Even as the banking sector struggled in the recent past, it is likely to drive the stock markets in the coming months, said a global market strategist. The banks are expected to post good earnings and this would pull up the Nifty earnings, said Ridham Desai, MD, Morgan Stanley India, in an interview with ET Now. “20% is something that we should now hope for and expect over the next three-four years,” he added. The financials led by corporate banks may lead earnings revival, he said. The global issues don’t matter much to the stock markets much now apart from probably on a day-to-day basis, the market expert also said. “The global stuff is not mattering apart from maybe a day to day basis but not much mattering to the trend”, he noted. The investors are showing great interest in the Indian stock markets and the investment flows should only improve from now onwards, he added.
Speaking further, Ridham Desai said that the investment cycle in India is currently turning around and the corporate houses are changing their business models. The non-performing businesses need to be flushed out of the system on the same lines what America did in the past. “This is what made America what it is today,” he added.
On RBI, the veteran investor said that the central bank is now is shifting from monetary tightening to releasing liquidity and spurring growth. Commenting on the recent reforms, Ridham Desai said that the RERA and IBC were the structural reforms which have been under appreciated. The IBC will ensure capital allocation of our country materially, he added.
On the ongoing NBFC issue, he said that the IL&FS issue triggered the slowdown resulting in the NBFC liquidity crunch that impacted consumption. However, the issue has reached its peak and may reach normalcy soon, he noted.