Earnings delivery should continue to be good; this is a multi-year phenomenon for us: Rahul Bhuskute

economictimes.indiatimes.com:

Rahul Bhuskute, CIO & EVP, Bharti AXA Life Insurance, says: “Given a relatively stable rupee, given inflation, which is sub-6%, given core inflation around the 5% handle, the probabilities of interest rate cuts in India going forward are going to increase and the market should definitely get a tailwind because of that. Have the markets harvested all the tailwinds and front ended all the earnings of all those potential interest rate cuts? We do not believe. So, there is some more to come around that factor.”

Markets seem to be in very good shape right now but are the markets ignoring risks on valuation front or are you of the camp that earnings quality of corporate India, the corporate earnings to GDP ratio is actually improving and hence the decline will be cushioned by earnings. Which side of the camp are you?
Rahul Bhuskute: I guess clearly markets are at a high and we do believe there are reasons for the markets to do so. First of all, globally the interest rate cycle has peaked out. There is an expectation that interest rates will start coming off. Definitely, in India, we have clearly passed the point of highest rate and therefore the opportunity cost for an equity investor is low and we do expect that to be a continued tailwind for the market going forward.

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