Ayaz Ebrahim, CIO Asian equities ,ex-Japan, Amundi has expressed his views on Indian stock market and has become bullish on the stock by virtue of recovery being shown in the market and being at a fair valuations. His free and frank opinion is appended below:-
India certainly, especially in US dollar terms, did not do very well, especially towards the latter part of last year. We have seen a good recovery this year so far. We actually have become a little bit more constructive on India for few reasons. First of all, valuations are definitely looking a lot better today than they were. If you are looking at from a PE stand point, on a 12-month forward basis, we are looking at something like 12 times PE compared to historical average of about 15 to16 times. Earnings for financial year 2013, we think earnings EPS growth could be as high as 14-15%, although at this stage the comfort level at that number is still not as high as we would like. That will compare to something like 10% for this current fiscal year. So, we are seeing an improvement. Also, we believe that the interest rate cycle has reached its peak. We possibly will see easing from the Reserve Bank of India over the next few months. That we believe that will also be positive for the equity market as well as economic activity in India.
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