A Conversation With : Shreyash Devalkar, Fund Manager (equities) BNP Paribas AMC
Updated on: 21 Jun 2016
Corporate earnings in the last quarter had many positive surprises, especially from sectors like materials, telecom and industrials where trends have been poor in the recent past. With the earnings cycle expected to improve, the valuations are likely to run ahead of real delivery. Hence, the market is already getting re-rated, says Shreyash Devalkar, fund manager (equities) BNP Paribas AMC, in an interview with Ashwin J Punnen of Financial Chronicle.
The equity market has gained over the past three months. Is there more steam left in the market?
The coordinated actions taken by the government, the central bank and the judiciary to increase transparency, addressing the NPA issues and improving the ease of doing business may play a long-term role in attracting FDI to India. It may have a better multiplier effect on the economy and in job creation. The monsoon is expected to be above normal, which may boost the rural economy, which was suffering from two consecutive bad monsoons. In addition, wage hike from 7th pay commission implementation along with its collateral impact on other sectors may drive the consumption economy in some sections. Further, on the investment side, the government is focusing on infrastructure spend and investment in road, defence, railways. This may add to the investment economy, though private sector capex may remain subdued. Thus, with the two crucial pillars of GDP growth – consumption and investment –showing signs of improvement, the market is expected to do well near-term.
What according to you will drive the market in the coming months?