View from the buyside: ‘India best in the world in earnings but not on valuations’

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New Delhi | Published: March 12, 2015 1:20:57 PM

In terms of 2-year earnings growth, India with a 16 pct growth rate is the best in the world, but its valuation premium is not as high...

indian market, market, market capitalisation, indian market news, indian market today, indian market growth, kotak mahindra, business news, trade latest newsIn terms of 2-year earnings growth, India with a 16 pct growth rate is the best in the world, but its valuation premium is not as high. Reuters

In terms of 2-year earnings growth, India with a 16 pct growth rate is the best in the world, but its valuation premium is not as high, says Harsha Upadhyaya, chief investment officer of equities at Kotak Mahindra Asset Management.

* Adds India generally trades at 20-40 pct premium to rivals

* MSCI India is currently trading at 12.5 pct premium to MSCI World – Thomson Reuters Datastream

* MSCI Index – 1 year forward PE
India        18
World        16
Asia Ex Japan    13
Source: Thomson Reuters Datastream

* Says India will continue to get higher share of foreign flows due to a fall in crude oil prices

* Adds govt would continue with reforms as there is no political roadblock for the next 8-9 months given state elections are due in Nov-Dec

* The fund manager likes banks, auto and cement stocks

* Remains underweight on telecommunication stocks as competitive intensity remains high

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