Nimesh shah, MD & CEO, ICICI Prudential Mutual Fund about how Indian economy is growing.
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00:00 I think we are doing all the right things in a systematic way. There will be lots of
00:16 debates whether the speed is right or not, but I think directionally we are in the right
00:20 direction. India is a country, we are blessed to be in a country like India where the nominal
00:27 growth is around more than 10%. How many countries in the world can say that? Right now corporates
00:34 have invested big time but they are not getting enough returns on that. If you see the ROE
00:39 of corporates, they are at an all time low. So I think over a period of time, their capacity,
00:44 why the ROE is low? Because the capacitorlizations today are low in various industries. I think
00:49 in the next 2-3 years because of this normal growth, the capacitorlization in various industries
00:54 will go up. As the capacitorlizations will go up, the operating leverage will kick in
00:58 and they will make much more money than what they were making earlier. The EPS of these
01:02 companies is set to grow in the next 2-3 years and as their EPS grows, you will get more
01:08 than a good adequate return from the stock markets by investing in stock markets. So
01:12 while in the short term there will be volatility, I believe that investors should invest in
01:16 equity today to get return by 2018-2019. But whatever is your equity allocation, please
01:22 finish it before December 2016. Because capital markets always discount the future first.
01:32 So you have to give 2 years time. Last year when I met you, I used to say at least give
01:36 3 years time to the market. Now I am saying give 2 years time to the market. Invest in
01:40 2016, you will make decent. We believe there is a good probability of making decent returns
01:46 by 2018-2019.
01:47 Thank you.
01:51 (upbeat music)