Published on 23/05/2019 4:05:07 PM | Source: Kotak Mutual Fund

India Lok Sabha Elections 2019 - Kotak Mutual Fund

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Below is the views on View on India Lok Sabha Elections 2019 by Nilesh Shah, MD & CEO, Kotak Mutual Fund


"Removal of political uncertainty is always welcome from a market point of view. Current mandate shows the maturity of voters in choosing a stable government  Now with that uncertainty behind  market will focus on steps taken by the Govt to encourage investment and give push to consumption, which is hitting a soft patch. 

Market is looking at the second term of Modi Sarkar to build on the foundation laid in the last term.  India has good macros in form of low inflation, better tax compliance, fiscal prudence,  high FDI and manageable current account deficit if oil remains at current levels. Now market believes that  stage is set for accelerating growth to higher level by tackling certain challenges like revival of investment and  support consumption growth. Changing the orbit of Indian GDP growth from current 7% level to higher level (eventually to aspirational double digit growth) is what markets are expecting from the second term of the Govt.  

Markets are pricing in  double digit  earnings growth over next few  years. From a risk-reward point of view, the market is delicately balanced. The direction of the market will depend on the steps that the government takes to accelerate growth."