Inflation a larger worry in India given CPI, WPI spread: Ambit Capital
Inflation is a larger worry in India given Consumer Price Index (CPI) and Wholesale Price Index (WPI) spread, said Dhiraj Agarwal, co-head of equities at Ambit Capital, on Wednesday, adding that next fiscal (FY23) will be the key for banks' credit growth.
Inflation is a larger worry in India given Consumer Price Index (CPI) and Wholesale Price Index (WPI) spread, said Dhiraj Agarwal, co-head of equities at Ambit Capital, on Wednesday, adding that next fiscal (FY23) will be the key for banks' credit growth.
In an interview to CNBC-TV18, he said, “The biggest risk is inflation. All other smaller events are culminating into that one number or one factor which is inflation and this inflation is a bit of a worry around the globe.”
“In the Indian context it’s a bit of a larger worry because of the huge spread between CPI and WPI which means that the corporate is taking the margin hit especially the consumer-facing companies and margin hits will reflect in earnings and earnings cut going forward which will reflect on the market,” said Agarwal.
Also Read: Inflation not a significant problem for India; banking sector looks interesting: Morgan Stanley
According to him, the next fiscal will be the key to banks' credit growth. “Things like resources and metals will do decent earnings. A few banks will do okay, few may not, but for banks more relevant is what happens in the next financial year whether the credit growth picks up to double-digit or get stuck in the range of 7-9 percent that we have seen so far,” he said.
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