Market Analysts’ Poll at Three Years of Modi Government

Market analysts are satisfied with the government’s pace of reforms and expect equities to surge higher.

Updated
Business
2 min read
Prime Minister Narendra Modi. (Photo: PTI)

In the three years of Narendra Modi-led government, Indian equities have breached records and benchmark Nifty 50 index has gained more than 29 percent during this period, led by the automobile and financial services sectors.

The government has managed to pass key reforms like foreign direct investment in insurance and a bankruptcy code. However, bad loans still remain a big worry for the banking sector even as the government focuses on reviving power, steel and infrastructure sectors, the biggest contributors to non-performing assets.

Indian markets showed strong resilience to domestic and global jolts in the last three years, recovering quickly from a rate hike by the US Federal Reserve and demonetisation.

An anonymous poll of nine analysts conducted by BloombergQuint found that most of them are satisfied with the government’s pace of reforms and expect equities to surge higher.

Are analysts satisfied with government’s pace of reforms? (Infographic: BloombergQuint)
Are analysts satisfied with government’s pace of reforms? (Infographic: BloombergQuint)

Respondents ranked the Goods and Services Tax (GST) and consolidation in the public sector space as the two key reforms that have taken place over the last three years.



 (Infographic: BloombergQuint)
(Infographic: BloombergQuint)

The Nifty may be at an all-time high, with some stocks expected to be in the overpriced category, but most respondents to the poll expect only a small correction, if any, even at current prices.

 Indian equity valuations. (Infographic: BloombergQuint)
Indian equity valuations. (Infographic: BloombergQuint)

The markets, in general, will give a 5-10 percent return over the next 12 months, according to half the people polled. Forty percent believe that investors will see a return of more than 50 percent while 10 percent said returns will be flat.



Predictions for segments that will outperform. (Infographic: BloombergQuint)
Predictions for segments that will outperform. (Infographic: BloombergQuint)

While mid- and small-cap stocks have rallied the most in the last three years, most analysts polled by BloombergQuint said that it’s the large-cap counters that will gather speed from here on.

Predictions for economy-related sectors. (Infographic: BloombergQuint)
Predictions for economy-related sectors. (Infographic: BloombergQuint)

An overwhelming number of respondents agreed that economy-related sectors will make a comeback given the government’s reform drive.

(This story was originally published on BloombergQuint)

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