Market’s ‘Big Bull’ Rakesh Jhunjhunwala is confident that an economic recovery is at India’s doorstep on the back of several factors including a slew of government’s initiatives and a good monsoon.
Consumer demand is reviving and the inflation is low, Jhunjhunwala said. India will have an 8 percent GDP growth as the new normal and slowly the country will inch towards 10 percent over time, he added.
Jhunjhunwala shared his outlook on the market and economy in CNBC-TV18’s Diwali special series Samvat 2073. Spelling out some market statistics the legendary investor said since 2013, when the Nifty bottomed at 5,700, the market has gained about 16-17 percent on a compounded basis.
Even though the pace of change or growth in Indian economy has been slower than anticipated, Jhunjhunwala believes the Indian economy today is in a situation like 2002-04 and may be on the cusp of a major turnaround.
During 2002-03, the rate of saving was 26 percent, rate of investment to GDP was 25 percent and rate of corporate profits to GDP was 2.2 percent, he said adding that the numbers went up to 37 percent, 35 percent and 7 percent, respectively.
This change was mainly led by investment boom caused by lower inflation, he said. He expects a disproportionate gain in percentage of corporate profit to GDP and therefore, a disproportionate rise in corporate profit growth, going ahead.
Maybe Indian economy today is in a situation like 2002-04. Indian economy may be on the cusp of a major turnaround, he said.
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