ETMarkets Smart Talk | India’s diverse earnings story could bring FIIs back: Bandhan Life’s Avinash Agarwal
While foreign institutional investors (FIIs) have remained net sellers over the past two years amid India’s premium valuations and an earnings slowdown, Avinash Agarwal, Senior Vice President & Head – Equity at Bandhan Life, believes the tide could turn as India offers a diverse pool of large companies with consistent growth and greater earnings visibility.
India's equity markets have displayed resilience following a strong start to the financial year, despite global tensions and market fluctuations. The impact of the artificial intelligence (AI) trend has diminished, benefiting India as it is considered a net loser in this sector. Q1 earnings have outperformed expectations, with companies maintaining margins amidst rising inflationary pressures.
Private sector capex has slowed recently, but analysts believe it is a temporary setback, citing high capacity utilization, improving credit growth, and strong corporate cash flows. Foreign institutional investors (FIIs) have been net sellers over the past two years due to high valuations and slowing earnings, but they may return as India offers a diverse range of large companies with consistent growth and strong earnings visibility.
The market may correct premium valuations, but India's long-term growth prospects and domestic demand make it an attractive long-term investment.
Written by urgent.news from The Economic Times - Top News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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