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India in sweet spot; see 12-13% mkt return in 1 yr: CLSA

Mahesh Nandurkar of CLSA says investors did not factor in impact of disinflation on earnings estimate. The property market is also going through slowdown due to disinflation

India is in a sweet spot when compared with other emerging markets considering its macros are improving, says Mahesh Nandurkar of CLSA. But, there is a sense of disappointment in terms of corporate earnings, he says. However, the silver lining at the moment is that domestic investors are willing to take a long-term view on India, he adds.

According to Nandurkar, investors did not factor in impact of disinflation on earnings estimate. The property market is also going through slowdown due to disinflation. Nominal inflation is down to 8 percent from 14 percent. He in fact does not expect supernormal equity returns over the next 12 months. He sees the market giving 30 percent returns in the next two years and 12-13 percent return in one year.

He is overweight on IT sector as recovery in the US market is expected. He also expects financials like banks and NBFCs to do well over the next two years. He believes capital goods, cement and property will lead market returns.

More to follow….

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