By line : Amit Tembhurnikar
New Delhi: ET Now spoke to a Singapore-based equity investor
Hugh Young assumes little earnings will be hit this year and said they are cutting earnings estimates. He thinks staying invested in quality businesses, businesses they know, and avoiding expensive businesses with valuable revenue is their approach. He believes selling by foreign investors in India is risk averse as investors shy away from emerging market funds. He added that professional portfolio managers have become forced sellers as redemptions occur in their funds.
He says the outperformance of Indian markets has made India relatively more expansive compared to other Asian markets. Given the current large exposures to China by major fund managers, they are now looking to Southeast Asian markets which are likely to benefit from commodity prices.
Young shared that in India they are still bullish on banks and have exposure to HDFC and HDFC Bank, Kotak, Infosys, TCS, HUL. He further added that the HDFC twins have strong underlying businesses. He estimates that, from a medium to long-term earnings perspective, private banks, IT, consumers and new businesses can generate 15-20% earnings growth.
Hugh Young further shared that his portfolio holds stakes in recently listed companies Nykaa, MapMyIndia, Vijaya Diagnostics. He suggests surprisingly rapid growth can come from smaller companies like Affle, MapmyIndia, but with inherent risk. He believes that India is capable of 10-15% earnings growth and that India is one of the best markets for dedicated emerging market investors.