India Inc. is expected to post an earnings growth of 10-15 percent in 2019-20 as the consumer sentiment wanes, said Andrew Holland, chief executive officer of Avendus Capital Public Markets Alternate Strategies LLP, setting a more bearish target than the market consensus.
“A 20 percent earnings growth is wildly optimistic even if they give a package. We are more between 10 percent and 15 percent,” he told BloombergQuint in an interview on Wednesday.
Several brokerages and research firms, including Morgan Stanley and JM Financial Ltd., have downgraded their earnings growth forecast for this financial year to around 20 percent after the first-quarter results.
Expectations of a fiscal stimulus have gripped the markets after Prime Minister Narendra Modi held a meeting with Finance Minister Nirmala Sitharaman on Aug. 15 to assess the state of the economy. “Any delay in the government's announcement on a fiscal stimulus will have a negative impact in the short term,” Holland said.
Key highlights from the conversation:
- Expectations of a falling interest rate have been a tailwind for markets so far.
- Global economy is heading towards a recession.
- Sentiment is super bearish at the moment.
- Small and medium-sized businesses are suffering the most.
Watch the full video here:
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