Indian fund managers see earnings revival, eye opportunity in consumption

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Budget 2019

Indian wealth and alternative investment managers expect the next federal budget to propose measures that will improve consumption and bolster infrastructure to revive economic growth.
Newly appointed Finance Minister Nirmala Sitharaman will present her first budget on Friday. Growth slowed to a five-year low of 5.8 per cent in the first three months of 2019, amid a liquidity crunch at non-banking financial companies. That’s put pressure on recently re elected Prime Minister Narendra Modi to deliver on a stimulus plan.
Here’s a roundup of views from fund managers on current opportunities in the market:
Nalin Moniz, chief investment officer, alternative equity, Edelweiss Asset Management Ltd.
Liquidity conditions are slowly normalizing; the cash squeeze should normalize in 1-2 quarters.
Expect to see a broad-based revival in earnings in the latter half of FY20.
Sees opportunities in consumption, exports and financial services sectors on a 5-year horizon.
Over the longer term, both consumer goods and discretionary consumption are expected to boom as the Indian economy grows from $2.7 trillion toward $5 trillion.Nifty’s current valuations are incomparable to the past, as index’s composition has shifted from manufacturing toward financials.
Vijay Krishna Kumar, head of liquid alternative investment, IDFC Asset Management Co.

The budget will be another non-event accounting exercise.