India Investment, Stocks, Credit Card and Retail Forum
Investments in Indian Equity and Research => India Stocks and Shares => Topic started by: komal on June 28, 2010, 02:12:40 PM
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Citi one of the Largest FIIs has the following view on Indian Equities,
India’s macro parameters have not changed meaningfully since the beginning of the year; Inflation remains high, rates are expected to rise, and the fiscal deficit is well above recent averages.
The ‘economic cruise’, as we called it earlier in the year, is now steaming up, a bit. We see this in broad-economic data and aggregates, management confidence across most businesses and a relatively robust and building investment pipeline, and consumer confidence that continues to edge up. We see this as positive – and, importantly, sustainable, and argue that corporate and consumer behavior is fairly rational.
India is trading at 15.1x 1 yr fwd (v/s. historical avg of 15x); so we would not buy for valuations. We would however not ‘not buy’ because of valuations; as we believe a reasonable mix an improving Macro and strongly growing business are unlikely to trade down – but could well trade appreciably above avg. We see upsides to market & multiples – less on earnings.