India’s negative halo is beginning to fade, and the turnaround could become even more visible in the months ahead, says market veteran Samir Arora, founder of Helios Capital in an exclusive interview on The Wealth Formula with N Mahalakshmi.
Arora believes the Indian market has already been doing better than its headline performance suggests. The improvement, according to him, began around April, but was obscured by weakness in large-cap stocks, particularly banks, IT companies and some consumer businesses. Mid- and small-cap stocks, as well as the average stock, had performed better.
What could now change the narrative is an improvement in India’s earnings growth, a more stable currency, the possibility of lower taxes and a shift in the political equation in the US.
“The Indian market... has already started doing well, actually, according to me, since April one,” Arora said in an interview. As India performs better and other markets no longer significantly outperform it, the need to explain away India's underperformance will also diminish.
Arora’s improved outlook rests substantially on the prospect of stronger earnings growth.