2 days ago
Nilesh Shah Sees Over 7% Growth, Warns Oil Prices Matter
Nilesh Shah thinks India’s economy will grow by more than 7% this year.
He said growth continued into the second quarter.
For growth to reach 7% next year, he said oil prices need to be lower.
He also warned that weak monsoon rains and problems with supplies could make growth harder to maintain.
Inflation is going up, though it is still below the Reserve Bank of India’s upper target range.
Shah said interest rates may need to rise.
He said many companies selling shares have added pressure to the markets.
Foreign investors have also sold shares this year.
He thinks investors should carefully choose individual companies.
Nilesh Shah said growth above 7% looks certain for the current year, with momentum continuing into the second quarter.
He said lower oil prices would be needed to achieve 7% growth next year.
Shah cited a 12% monsoon deficit, triple-digit oil prices and supply-chain disruptions as risks to growth.
He said inflation is rising but remains below the Reserve Bank of India’s upper target range, and interest rates may need to rise.
Shah said more than $50 billion in IPO, QIP and OFS issuances over three years have pressured markets, while FPIs sold ₹2.5 trillion this calendar year.
- Who
- Nilesh Shah, managing director of Kotak Mahindra AMC.
- What
- He said growth above 7% looks certain this year, but lower oil prices would be needed for 7% growth next year; he also outlined risks to growth and market pressures.
- Where
- India.
- When
- The current year and next year; Shah also cited developments in the second quarter and current calendar year.
- Why
- Shah said lower oil prices are needed to support next year’s growth target, while a monsoon deficit, supply-chain disruptions and market pressures pose risks.
Key facts
- Current-year growth outlook
- Above 7% growth looks certain, according to Shah.
- Next-year growth condition
- Lower oil prices would be needed to achieve 7% growth.
- Monsoon deficit
- 12%, as cited by Shah.
- Market issuance
- More than $50 billion in IPO, QIP and OFS issuances over the last three years.
- FPI selling
- ₹2.5 trillion in the current calendar year, according to Shah.
- Inflation
- Rising, but below the Reserve Bank of India’s upper target range, Shah said.
Quotes
Nilesh Shah
Managing director of Kotak Mahindra AMC
“Earnings are strong but on the other side supply is huge and future is looking little bit tense.”
CNBC TV 18
“We are at a scenario where we need to be very, very careful for maintaining growth.”
CNBC TV 18
Sources
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