Fundamental turnaround will depend on government moves

Ridham Desai, MD and Head-Equities, Morgan Stanley was Speaking on India’s gross domestic product (GDP), he said he was expecting a GDP growth of 6.2% in FY10 and 6.8% in FY11. “The street may be under-estimating earnings growth,” he said, adding that the bull case scenario called for significant upside on government action.

Ridham Desai, MD and Head-Equities, Morgan Stanley was ‘overweight’ on the consumer discretionary sector and had removed ‘underweight’ on financials sector. He said for the first time in two-three years, India was able to attract money on its own fundamentals. “Fundamental turnaround will depend on government moves,” he said.

If the government came out with infrastructure reforms, removed certain taxes in budget, the markets may go back to their old highs, he said, but added that the probability of the markets touching new highs was not very high at this point. “If global markets go under stress, India will find tough to deliver absolute returns,” he said.