2 weeks ago

India's FY27 Recovery Hinges on Investment, Earnings and Growth

Taher Badshah thinks India's economy and stock market could improve in FY27.

He says several helpful factors may support this recovery.

These include last year's policies, a good monsoon, easier comparisons with the previous year and better company earnings.

He believes India needs more investment in factories and industry.

Government spending helped growth before, but private companies now need to invest more too.

About half of listed companies are growing their earnings by at least 15 per cent.

Badshah likes industrial, healthcare, consumption and some new-age companies.

He is more careful about commodities because their prices are difficult to predict.

Key facts

Outlook: FY27 is expected to be a recovery year for India.
Earnings growth: About half of the listed universe is delivering earnings growth of 15 per cent or more.
High-growth companies: Many companies are reporting earnings growth above 20 per cent.
Needed investment: Badshah calls for a new investment cycle focused on manufacturing, industrial capacity and stronger private investment.
Preferred sectors: Industrial companies, healthcare, consumption and selected new-age businesses are viewed as attractive growth areas.
Value opportunities: Some IT services and banking companies have reasonable valuations despite currently weak performance.
Commodity view: The fund remains relatively cautious on commodities because their cycles are difficult to predict.
Return focus: The investment approach seeks businesses capable of compounding earnings at 15 per cent or more, rather than targeting a fixed return.

rediff.com · 2 weeks ago