India's manufacturing sector is bouncing back after many years, said Hiren Ved, CEO, Diretor and CIO at Alchemy Capital Management on Tuesday, September 20. The investment firm expects sustained earnings of 20 percent in the medium term and upgrades in the second half of the current fiscal.
“It was a lost decade for manufacturing, pretty much, and now manufacturing is coming back,” Ved told CNBC-TV18 while adding that the investment firm is looking at some interesting stocks from speciality chemicals, defence and electric vehicles (EV) space.
On corporate profitability, Ved said that as a percentage of GDP, it can move higher than 7 percent in the coming years. He also believes that earnings will grow consistently by 20 percent in the coming years and it’s possible that there will be earnings upgrades in the second half of FY23.
“By the second half of the year, you will probably see upgrades starting to happen. Autos, banks, financials and capital goods — that is where the earnings growth is likely to come through,” Ved said.
The equity market is heading to higher levels.
“India is in a great position despite all the challenges that we are seeing around the world. And I have no doubt that our markets, structurally, are heading to much higher levels than where they are today,” Ved added.
The portfolio management group also expects that the Indian market will continue decoupling from the global equities. However, crude prices inching back towards $100 per barrel is a worry.
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