MUMBAI: India is likely to trump short-term worries such as inflation, oil prices and a weaker rupee and still is among the top countries to invest in, said Neil Kansari, a senior portfolio manager at Sands Capital Management, a portfolio management firm based out of Arlington near Washington DC.
“In the long term, we remain very optimistic. India has young demographics, large population, under penetration in every consumer category and infrastructure is still being built out,” said Kansari, speaking on the sidelines of the recently held Morgan Stanley 20th Annual Investor Summit.
“In the short to medium term, there are definitely some worrisome things. There are some concerns around the political situation, inflation, oil prices going up and the India rupee weakening a little bit. If we take a step back and I look at the world globally and particularly in emerging markets, India still bubbles up as one of the top countries that we like to invest in,” Kansari said.
Oil has been one of the main worries for India as the country imports a significant amount of its oil requirements. Higher oil prices put strain on Indias fiscal math.
Kansari favours the financial sector and sees opportunity there given that financial penetration is still low in India. “Between banks, PSUs have been going through tremendous stresses and bad numbers but if you look at all the private sector banks — not all but many of the high-quality private sector banks — they have been delivering very good 20-25% earnings growth. Thats in a global context is very strong,” he said. “In India, financial penetration particularly in the consumer side is extremely low. Financials is an area that is still very interesting long term.”
On reports that MSCI Inc was looking to place India on notice for limiting investor access and could cap its weight, Kansari said it was not a significant worrying factor.
“We are benchmark agnostic. If fund flow dries up, it could have some impact on valuations. If there are good opportunities in India, money will come in through active managers like us rather than passive benchmark-type funds. I dont worry about it too much,” said Kansari.
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