India a long-term growth story; I see greenshoots: Rashesh Shah

He warns that the next couple of months will see a lot of volatility in emerging markets as Brexit and US Fed developments could weigh heavily.Below is the verbatim transcript of Rashesh Shah's interview with Anshu Sharma on CNBC-TV18.Q: What is your view on India and are there any signs of improvement in the economy?A: Post October, we have started seeing -- whether it is auto, cement, road and construction -- for last about five-six months there have been green shoots. Almost every corporate that I have spoken to in the last three-four months have said that their business has improved. So, there is a clear improvement across sectors, across all the business lines. Even in things like power and other sectors there is improvement.The problems of the past are still not completely cleaned up because we still have the bank non-performing assets (NPA) issues, a lot of projects are still under execution but things have improved post October. Retail sales have been doing fairly well. So almost every company that you speak to is seeing improvement. I would think this should at least show the path towards uptick in the economy. I believe if the monsoons are good then we should have a good year ahead of us.Q: Since we are in the earnings season, what are you making sense of the earnings of the corporate?A: Q4 earnings were not that bad as all of us had expected. Of course, the banks have shown the NPA cleanup cost that has been going on. So if we exclude the banks, I would say overall the earnings have not been that bad and almost every company is showing an uptick in some form or the other. So, I would think maybe 2017 is a year where earnings will come back.Also don’t forget, even banks have had very depressed earnings and we are seeing very low base now. So on that basis, seeing growth in 2017-2018 should be a fairly low hurdle for corporate earnings to cross. So I am fairly optimistic and I do believe over the next couple of quarters, if we continue this same uptick that we saw in Q4, we should then be confident that India earnings growth is back on track.Q: What about the markets, where do you see Indian market standing, is it overvalued, undervalued?A: Indian market is always fairly valued because I would always say that from a growth point of view, it is always undervalued because you are paying for growth, you are not paying for any undervaluation because India story is very strong, India story is very well understood by global investors.A lot of the fund managers are Indians in the global scenario. So they understand India very well. Except for small periods, India is never hugely cheap but it is always cheap from a long-term growth point of view.If earnings are coming back then we are coming of a base of low earnings and I do think that a lot of global capital is starting to look at India. So maybe 2017-2018 is where we will see a significant flow of capital coming into India given the India growth story.I feel confident but as I said the next couple of months, there will be a lot of global volatility especially Britain exit, US raising interest rates, US dollar becoming stronger, all of those will lead to some emerging market volatility as always happens every five-six months.So I would say, people should expect short-term volatility but the long-term India story has to pan out.