Reasons for change: politics, macro, micro Following a detailed set of meetings in Delhi and Mumbai, we believe it is appropriate to raise our investment stance, recognizing the equity market has risen sharply from 3Q lows. Key reasons: Optimism over political change, led by BJP’s prime ministerial candidate Mr. Modi, is dominating economic concerns. External capital account pressures have moderated, at least for now. There are early signs of cyclical pick up and structural improvement. The earnings outlook is stabilizing and we have raised our CY2014 EPS growth forecast from 8% to 11%. Midrange valuations are not a constraint if fundamentals continue to stabilize; midcaps trade at a 30% discount to the broad market. Retail redemption pressure could moderate, which could improve the equity demand/supply balance.
Posted on: Tue, 05 Nov 2013 05:24:15 +0000