Worst is Behind for Indian Economy, Bay Capital’s Kodikal Says
January 4th, 2023
The worst may be over for India’s economy with higher consumer spending and positive trends in the manufacturing sector underpinning a recovery, according to Prachi Kodikal, partner at Bay Capital Investment Managers Pvt. Ltd.
“Credit card spends are up, airline traffic numbers are up,” Kodikal told Bloomberg Television’s David Ingles and Yvonne Man on Wednesday.
Cash with Indian corporates is at a 14-year high and many are beginning to announce new capex projects, Kodikal said. Capital spending announcements for the private sector “almost doubled last year, which means a lot of companies are getting into the investment cycle,” Kodikal added.
Last year, expansion in the corporate sector was driven by higher prices, but this year Bay Capital expects volumes to drive growth and profitability. Moreover, commodity prices have eased by 20% to 25%, which should bolster margins, she said.
The valuations for some companies in the “consumption basket” are still high, but Bay Capital would look to invest in cash-rich, quality-managed companies which can have sustained earnings over the next two to three years, Kodikal said.
Excerpts from the interview have been covered here on the Bloomberg website :- https://www.bloomberg.com/news/articles/2023-01-04/worst-is-behind-for-indian-economy-bay-capital-s-kodikal-says
Posted by Siddharth Mehta, Founder & CIO