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Market to give 30% returns over two years: CLSA

Over two years, market will deliver 15 percent compounded growth and will give 30 percent returns, Mahesh Nandurkar, Indian strategist at CLSA says adding that the key factor in growth will be capex recovery.

Despite good macro indicators, corporate earnings have not improved in recent times, says Mahesh Nandurkar, Indian strategist at CLSA. He says low inflation has hurt property and rural market due to which positive macros haven’t transmitted to earning numbers.

He expects the recovery to be slow, though the initial signs are visible. Over two years, market will deliver 15 percent compounded growth and will give 30 percent returns, he says adding that the key factor in growth will be capex recovery, which is expected to be slow. He expects further earning downgrades in the near-term.

Nandurkar is bullish on sectors like IT, financial service and automobile, where earnings are visible. On the other hand, he is overweight on sectors like pharmaceutical, energy and stables.

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