Indian Equities on a Long-term Bull Phase

…fuelled by global equities’ rising growth premium, favourable demographics, diminished policy risks and equities’ under-owned status

This report launches PL’s equity strategy coverage of the Indian market. Our team’s coverage of the Indian market conjoins top-down with bottom-up dynamics. At the top-down level, our team’s expertise seeks to exploit the Indian market’s long-running dependence on global macro and market dynamics, especially over short time periods. Such analysis allows us to derive prospective Asia regional relative Indian market and Indian market relative sector performance return outlooks. Such cross-market dynamics are most prevalent for materials, energy, IT and, to a lesser degree, industrials and financial sector stocks. At the bottom-up level, our team draws on the PL equity research franchise’s strong ability to cover the Indian equity market at the sector and individual company levels.
In our view, the Indian equity market is one amongst very few markets around the world to look poised to advance on a long-term bull phase over the next several years. Such view is arrived at by drawing on the rich set of precedents of countries undergoing secular bull markets, dating back several decades.

India’s outlook is supported by a plethora of self-sustaining fundamental drivers, complemented by supportive technical/positioning dynamics. The set of fundamental drivers anchoring the outlook are discussed in a linear fashion in the succeeding pages, including demographics, a sound mediumand long-term earnings outlook, a vastly improved policy backdrop and India’s allure at a point in history where growth premium is bound to reset at higher levels. On the other hand, the foremost technical factor anchoring the outlook entails the vast under-owned status of Indian equities vis-à-vis global and resident Indian investors.

Our bullish medium- and long-term investment outlook on Indian equities is tempered by concerns over the short-term outlook facing global equities.

To read the full report see attachment: INDIA EQUITY STRATEGY