Sanjay Ramdas Dongre, EVP & Sr. Fund Manager, UTI Mutual Fund is a B.E. (Instrumentation) graduate from College of Engineering and a PGDM from IIM Calcutta. He has been in UTI AMC since 1994. He started as a Debt analyst acting as a support service for fund management activity. He also worked as Equity Research analyst covering wide range of corporate and industries. Subsequently he worked as Equity Dealer, which involved handling all the activities relating to secondary equity market operations. Prior to joining UTI he has worked with Reliance Petrochemicals Ltd. as an officer in-charge of the Instrumentation Department.
UTI Mutual Fund is a SEBI registered mutual fund whose Sponsors are State Bank of India, Punjab National Bank, Bank of Baroda and Life Insurance Corporation of India. UTI Mutual Fund is one of the largest mutual funds in India with investor accounts of 9.58 million under its 128 domestic schemes / plans as on September 30, 2014.
Replying to Yash Ved of IIFL, Sanjay Dongre says "As the earnings CAGR growth is expected to be 17-18% during FY14-17, the market may quote at above average valuations during the period of high earnings growth. Hence the Indian market still looks attractive from medium term perspective."
The stock markets, world over, are seeing a lull after a splendid run. What is your view on the Indian stock market? In the last one year, the Indian stock market has rallied and has delivered a return in excess of 40%. With the sensex at 28000 levels, the market is quoting at 16 times earnings of FY16 and is slightly more than the average valuations at which market had quoted in the last ten year period. Hence the upside from the market in the near term appears to be limited. In the past, we have observed that the higher earnings growth is accompanied by the above average market valuations and lower earnings growth is accompanied by the below average market valuations. As the earnings CAGR growth is expected to be 17-18% during FY14-17, the market may quote at above average valuations during the period of high earnings growth. Hence the Indian market still looks attractive from medium term perspective.
What has changed after the Narendra Modi government has come to power? In the near term, the government is attempting to kick start the stalled projects by removing constraints related to resource mining, land acquisition, environmental and forest clearances. Cabinet Committee on Investments (CCI) is trying to expedite the processes and improve the ease of doing business in India. With revival in GDP, Indian corporate is expected to undertake capacity expansions (Brownfield and Greenfield) in the capacity constrained sectors. It may lead to revival of investment cycle in the economy. With decline in the inflation, households would be left with higher disposable income which may act as trigger for higher consumer discretionary spending in the economy.
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