Dalal Street may have been resilient in the face of global uncertainty from Greece and China, but the reality that surrounds corporate earnings is not very comforting.
SBI Mutual Fund says the first quarter of fiscal year 2016 will be a flat, with recovery only expected by the end of December
Commodities softening will have a positive impact on earnings but overall it may be flat or only slightly better than previous quarterwill be flat, says Dinesh Khara, Md & CEO, SBI MF.
The house is bullish on the FMCG & manufacturing sectors as it expects reforms like higher FDI caps & the Make in India drive to translate into better business opportunities.
SBI mutual fund is however cautious on banking & IT. The fund expects asset quality improvement to take another six months as the economy bounces back and the RBI lowers interest rates.
“We expect that maybe three months down the line there can be a rate cut, we expect that rate cut to be around another 25 bps,” says Khara
Talking about the impact of global environment impact on India, Khara says, the immediate impact would be of softening of commodity like crude and India being a major importer of crude, it has helped address fiscal.
SBI MF expects earnings growth to touch 15 percent over the next three years provided domestic & global factors remain stable.
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