Microsec:India Strategy December 2014 microsec.in/static/pdf/India%20Strategy%20December%202014.pdf Indian market is likely see lot of volatility in the initial weeks of December due to several events in place like outcome of winter session of parliament, Russian President’s India visit along with outcome of J&K and Jharkhand assembly election results. Christmas holidays worldwide may shrink volumes and markets may consolidate We may see sooner revival in the economy then what it was expected due to falling Crude Oil prices to ~$65 which happens to be significant positive for our economy as our import bills will be reduced and would improve CAD numbers along with input cost of corporate will come down considerably. We foresee crude oil price would remain lower and subdued after settling down in a range. BFSI may outperform during the month due to RBI’s dovish commentary on the monetary policy indicating interest rate cuts in the early part of next year. RBI is looking for strong growth on a sustainable basis without flip flop in policy stance . Investors should focus in Banks and NBFC’s where there is scope of improvement in financial and visibility of earnings. India is suddenly placed in a sweet spot as the savings arising out of low crude oil price and interest rate cuts next year seen as a major incentive to Indian Economic growth. In the past one month economic data like CPI, WPI and IIP indicates that growth is coming back in decline in inflation which triggers rate cut and subsequently increase in capex along with huge flow of investment in the country through Make in India program. Geopolitical issues, China slowdown, weakness in global markets and US Fed may indicate hiking rates sooner will prompt some investors to remain cautious. Nifty EPS(E) for CY15 is currently at ~567, Bloomberg consensus. On that basis we believe Nifty is likely to trade 14.2-14.9x CY15(E) earnings which makes a range of ~8100-8450 for December 2014. Finolex Cable, Crompton Gr, IDFC, BEL, IL&FS Transportation, Blue Star, UPL Ltd., Archies Ltd, Exide Ind, Balmer Lawrie, Thermax, Whirlpool, TCS, INFY, SBI,may remain strong.
Posted on: Mon, 15 Dec 2014 07:39:57 +0000
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