Few emerging markets as good as India: Jeff Chowdhry

He is bullish on private sector banks and select consumer names, and sees the rupee strengthening as the outlook on corporate earnings improves.

Below is the transcript of Sanjay Dutt's interview with Latha Venkatesh and Sonia Shenoy on CNBC-TV18.

Latha: Its about 9 percent increase in the indices just in one month over 31 percent rally all of last year. Do you think the fundamentals are catching up?

A: The fundamentals throughout 2014 and into 2015 have continued to improve. The single biggest positive hasn’t been the election; it’s been the oil price. There are whole sectors and whole areas of Indian industry which will benefit as well as the macro position. So yes, the fundamentals have definitely improved since this time last year.

Latha: You would say this rally is largely accounted for by oil prices maybe global liquidity, not domestic improvement?

 A: I think it has been multiple factors. Obviously the value started last year with the election of Mr. Modi, but there are number of things which have happened since then which suggests that the rally can continue for some period of time. The oil prices definitely big positive. India together with China and one or two emerging markets are big beneficiaries of the falling oil prices and some reforms have taken place – that is also positive for the market and looking forward I see lower inflation, lower interest rates and better earning growth, which is a powerful combination.

Sonia: We have seen that the expected Q3 corporate earnings have been lower than what the forecast was. Are you saying that we would have stronger corporate earning going forward and if yes, then when that would be?

A: The last quarter is a reflection of the past. It is much more important to look forward. Indian consumer has not reacted so far in a positive way to lower oil price and more money. We think it very simply, effectively the Indian consumer has been given a windfall in terms of more money in his or her pocket and that windfall will be reflected in increased consumer expenditure and a technical windfall in the sense that there are current account deficit, is going to come down.

Sonia: We have seen the Nifty move up about 8 percent in the month gone by. What kind of returns do you think one should expect in 2015?

A: I never worry about levels, I never worry about percentages. I look at it from the point of view is, is the fundamental outlook still positive, is there a tailwind behind that fundamental outlook and what are my alternatives in global emerging market context. I look around emerging markets and at this point in time, there are few stories out there which are good as India.