The prospects for earnings and equity look promising as inflation has peaked globally, supply-chain issues eased and major interest rate hikes are largely behind, according to Shiv Puri, managing director of TVF Capital Advisors.
Foreign investments into India this time appear to be more structural, aligning well with the geopolitical situation that India finds itself in, Puri told BQ Prime's Niraj Shah in an interview. "I have been going to (the) US since 2003 and this time, it is different, flows India is seeing now is more structural."
In July, foreign portfolio investors bought Rs 46,618 crore worth of Indian equities, remaining net buyers for the fifth straight month. They have bought equities worth Rs 1,23,025 crore so far this year, according to National Securities Depository Ltd.
Views Of Financials
Puri said the financial sector in India, including banks and non-banking financial companies, was currently in excellent shape. "The balance sheets are in pristine condition and they have been for a little while."
The demand side of the financial sector's story in India is characterised by structural factors. This structural demand is evident across various segments, such as mortgages and personal loans, according to Puri. "I still feel that there is a very long runway to go."
Discretionary Consumption
The discretionary consumption has seen a structural trend in India over the last two decades and Puri said this trend would persist for the next two decades as well.
He also said that the positive trend in disposable income, which is continuing to grow yearly, would continue and is expected to drive expansion in discretionary consumption in the country.
"There is a shift in spend and spend is more targeted towards services... post Covid," Puri said. "And, therefore, you're seeing hotel companies, especially some of the nicer hotel companies globally, do really well, whereas spend on certain other physical products has been a little lacklustre."
Puri said rural demand seemed to be turning now. "There was a burden on consumption spend from the rural part of the country, which seems to be now turning the corner," he said. "This time, India behaved very responsibly from a fiscal and monetary standpoint, and that's evident in the macro and inflation numbers."
Watch the full conversation here:
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