NEELKANTH MISHRA
Financials & utilities are the cheapest sectors; IT overpriced: Neelkanth Mishra
Neelkanth Mishra highlights undervalued financial and utility sectors compared to the overpriced IT sector. The Budget is expected to focus on rural support and fiscal prudence, with emphasis on Viksit Bharat 2047 initiatives. However, GDP growth may slow down, impacting FMCG sector earnings. Mishra expects consumption by the lower income households will grow slower than the GDP on average,
Tough to sustain GDP growth above 7.5%; time-wise correction in market likely: Neelkanth Mishra
As mutual funds are sitting with Rs 1 lakh crore of cash, whenever there is a 4-5% drop from the peak, there is a spate of buying. So equities as an asset class are not seeing sharp drawdowns and in the short term make it safer to invest in and attract more funds. That is the cycle we are in, says Neelkanth Mishra.
Past reforms will continue to drive economy over next 2 years: Neelkanth Mishra
In fact, with the RBI dividend being significantly better than what was budgeted, I would not be surprised if in the July budget, the government chooses to bring down its FY25 fiscal deficit target from 5.1% to 4.9% because that money is there.
We need a clear future growth path to sustain momentum over the next 20-25 years: Neelkanth Mishra
Neelkanth Mishra emphasizes the need for proactive policies and strategic infrastructure development to sustain India's growth amidst evolving global economic challenges, advocating for efficient tax reforms, energy transition, and enhanced construction industry strategies to drive long-term economic prosperity. Mishra says: "At this stage, the problem is dollar shortages and higher rates and therefore the risks are the reverse, but the moment the Fed restarts QE, I think the problems will turn to be on the other side."
Government needs to keep doing high quality capex even while controlling top line spending: Neelkanth Mishra
Neelkanth Mishra, Chief Economist at Axis Bank, believes that the Indian government may have extra cash in hand this year, resulting in lower borrowing for the next year. While the growth in capital expenditure may slow down, there should still be room for it as subsidies and basic expenditures like salaries and pensions are expected to decrease. Mishra also expects the government to continue its focus on macroeconomic stability and prioritize stability for growth.
US Fed may start liquidity injections by June next year: Neelkanth Mishra
Once RBI feels comfortable that now the Fed will keep easing for a while, it will allow them to go easier. When that happens is a much tougher question.
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Outlook 2024: Trend growth next five years is going to be well above 7%, says Neelkanth Mishra
“One of the reasons why the RBI may not find room to cut next year is the fact that food inflation is likely to remain quite volatile. The expectation of a four-four and a half handle about a year later is a reasonable one to have because of food inflation over a period of time.”
Chhattisgarh election results 2023: Full list of winners constituency wise
In the Chhattisgarh Assembly elections, the Bhartiya Janata Party (BJP) has surpassed the majority mark. This outcome contrasts with most exit polls that favored the Congress.
If construction is booming, why are consumer staple sales so anaemic? Neelkanth Mishra explains
“Some of the trackers that our Axis Capital colleagues who cover consumer track show that FMCG baskets are 30% more expensive than they were three years back and if you have that level of inflation, then obviously,volumes will start getting affected and which perhaps is also a reason why some of the smaller manufacturers are making inroads.”
Global outlook remains bleak; India's premium to the world will remain elevated: Neelkanth Mishra
“For all of this year, Nifty's performance has been driven by EPS upgrades which is mostly because of roll forward issues and the PE multiple has actually declined. The market performance is increasingly being driven by roll forward gains on EPS and so I think the Indian market will time correct.”
Indian economy better poised than China to handle global headwinds, says Axis Bank’s chief Economist
Mishra credited this growth to an increase in export of modern services, higher investment in infrastructure and better penetration of basic amenities through the country. While India's share in global services trade is 4.5%, we have done significantly better in the trade of modern services like remote work, taking up 8% of the market share, he said.
Neelkanth Mishra on link between market and government’s commitments towards road, defence & railways
“Incremental growth in terms of the pace of construction at the national highway level may not really accelerate from here. What can happen and seems to be happening, is that in state highways, a lot of work seems to be happening in Maharashtra, Uttar Pradesh and several other states. That is where there can be some acceleration.”
India already benefitting from China Plus One; just look at smartphone exports: Neelkanth Mishra, Axis Bank
"There are some other sectors as well where this is happening. I think a lot more can happen if we can improve our ability to give comfort to multinationals that India has regulatory certainty. We can give them that certainty much faster."
Neelkanth Mishra resigns from Credit Suisse; set to head Axis Bank's research business
The hiring is being seen as Axis Bank's broader plan to boost business, ET Now reported quoting agencies.
Credit Suisse veteran Neelkanth Mishra poised to exit for Axis Bank
A veteran of two decades at the Swiss bank, Mishra has agreed to helm Axis Bank’s research department, the people said, asking not to be named as the information is private. He is part of Indian Prime Minister Narendra Modi’s Economic Advisory Council and head of research at Credit Suisse’s local unit, according to the bank’s website.
Government has preferred stability over near-term growth: Neelkanth Mishra
I would disagree that this is a growth oriented budget in the sense that if you are bringing down your fiscal deficit from 6.4% to 5.9% you are actually reducing the support that the government provides to the economy and it is a very timely support meaning that as the economy then starts to come back on its feet then the support that the government needs to provide is less.
These 3 themes will decide stock market trajectory in 2023: Neelkanth Mishra, Credit Suisse
"The biggest theme is going to be the direction of the Fed funds rate. When we see the FOMC dot plots and look at the market implied Fed funds rate, it is aligned to the most dovish of the Fed fund forecasters. So clearly markets expect that the Fed will have to sort of downgrade its expectations of rate hikes and that there will be inflation outcomes. That would be the first major source of uncertainty. Second would be what happens to the Chinese economy."
Over next six to 12 months, will continue to be overweight on select PSU banks: Neelkanth Mishra
“Most of the foreign portfolio flows that come into India are coming through APAC funds or EM funds or global funds right. The share of India dedicated funds is lower than it was even five years back. So if more money goes into EM funds because people are feeling slightly better about China, then India also gets inflows. ”
Why Neelkanth Mishra of Credit Suisse is not ready to buy the dip in IT stocks just yet
“In our view, the point at which the job market in the US starts to show pressure, and company management begins to talk about weak order flow would be a good time to take a fresh look at this sector,” he says.
Showstopper Nifty unlikely to outperform in 2023, warns Credit Suisse top strategist Neelkanth Mishra
Having scaled new lifetime peaks and now eyeing Mt 19K, Nifty is by no means cheap. The 12-month trailing PE for Nifty stood at 23.4x, 17% higher than its long term average. India's market cap-to-GDP ratio now stands at 110% (of FY23E GDP), above its long-term average of 81%.
Credit Suisse’s Neelkanth Mishra urges caution, warns of high risk of accidents in global economy
“The likelihood of the PE multiple premium expansion and the PE multiples being meaningfully higher is quite low.. In our view, the 15-month long time correction that we have already seen and we have been expecting, which we wrote about in September last year, can run for another 9 to 12 months and I would stay cautious on the risk of global accidents. ”
IT stocks facing a never-seen-before challenge: Neelkanth Mishra, Credit Suisse
The seasoned market expert said as these two adjustments happen, growth will get downgraded. The margins which used to be 5-6% and went up to 12-15%, are now at 10-12%, and will need to fall to 6-8%, he said. “You will see a downgrade in PE multiples. That is why we are underweight IT services
Avocados & blueberries: The fix for India’s rising trade deficit?
India’s trade deficit is widening and the prime driver behind that is rising energy prices, owing to geopolitical conflicts and supply bottlenecks. Credit Suisse’s Neelkanth Mishra has a solution to salvage the situation, and it involves bringing down imported blueberries & avocados.
RBI growth forecast for India too conservative: Neelkanth Mishra
“The growth numbers that the RBI has put out are perhaps too conservative. I believe that the consensus growth forecast which is somewhat closer to the RBI’s forecast, is also very conservative. The growth momentum in the Indian economy is quite strong and those numbers can be beaten quite handsomely.”
How can divergence between bond and equity markets come off? Neelkanth Mishra explains
“My concern about our markets over the next year is more global than local. The domestic economy is doing fine. It is the global uncertainties which we have discussed earlier in our conversation that worry me a lot. If the world equities, global equities correct, then they will drag down India as well.”
Not Nasdaq selloff, it’s high PE that is ailing Indian IT stocks: Neelkanth Mishra
“ I do not think the selloff in Nasdaq is affecting the Indian IT stocks. There may be some minor links, but this is related to the fact that this sector had seen a lot of momentum which had pushed it up to unsustainable price to earnings levels and now is seeing a correction.”
Announcement on personal income taxes will be taken very positively: Neelkanth Mishra
“The temptation would be to consolidate aggressively but at the same time, the best way to get debt to GDP down is to basically grow nominal GDP faster.”
Can one play the US inflation via Bangalore real estate? Neelkanth Mishra explains how
“For India per se, the cyclical rebound is doing very well and we expect it will continue to pick up in the next couple of quarters….In India, the GDP is growing despite the government spending shrinking and this is something that needs a lot of attention of the markets and as well as for policy makers.”
Neelkanth Mishra explains why FIIs are selling out Indian stocks
"Even if FY23 and FY24 EPS was to be upgraded by 10% and the Nifty did nothing for one year, the one-year forward earnings in October 2022 would still be one standard deviation above the 10-year average."
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