Equity Market Outlook
While the above factors can dampen the near-term outlook, for the medium-to-long-term, we maintain our view that India's long-term growth story is intact. India's economy should continue to exhibit strength relative to other emerging markets, based on many macro indicators including strong Govt revenue collections, low corporate and bank leverage and stable external position. This should somewhat insulate India from a global economic slowdown.
- GST collections are up 13% YoY at Rs 1.72 tn for Oct'23, while net direct tax collections grew 22% till Sep'23 in FY24, containing fiscal deficit to 39% of FY24 budget estimate in H1FY24.
- Government capex growth till Sep'23 in FY24 is up 46% YoY with states beginning to contribute strongly. Real estate sales continue to pick up, as per media reports.
- Core sector growth for Sep'23 was 8.1% YoY and non-food credit growth as of Oct 6, '23 was 19.4% YoY.
- Oct'23 PMI-manufacturing reading at 55.5 was robust, while Sep'23 PMI-services was stronger at 61.
- Earnings growth so far in Q2FY24 gave no major cause for concern.