Gradual recovery seen in the domestic economy: Kotak MF

With marginal uptick in the second quarter GDP growth figures, Kotak Mutual Fund today said there will be a gradual recovery in growth in the next 12-18 months.

 

The fund house also said despite the current market levels, valuations are attractive, making a compelling case for investment in equities.

 

"We think, the domestic economy will see gradual recovery from now onwards. The growth in the next 12-18 months will mostly depend on performance of agriculture sector," Chief Investment Officer (Equity) of Kotak Mutual Fund, Harsha Upadhyaya told reporters here.

 

Official data released late last week said economy grew by 4.8% for the September quarter, up from the 4.4% in the preceding quarter. Though it registered an increase in the number, 4.8% is still shorter than the government target of taking the number beyond the 5% mark for the fiscal.

 

Referring to upcoming general elections, chief executive officer of Kotak MF, Sandesh Kirkire said that any stable government with reform initiatives would help the economy to continue in the path of recovery.

 

Upadhyaya also said market valuations are at attractive levels which gives good opportunity for investors to enter equities.

 

According to the fund house, though the GDP growth is likely to be in around 5% in the next fiscal, earnings growth for corporates is likely to be around 11-12%.

 

Meanwhile, the fund house also said though inflation remains sticky as of now, it is likely to ease in next six months.

 

"RBI may not aggressively cut rates going ahead, but it is also not likely to raise rates aggressively either," Chief Investment Officer(Debt) and Head Products, Lakshmi Iyer said.

 

She also said that the investors should look at fixed income as an attractive investment option.