According to Credit Suisse, India is expanding faster than the official statistics indicate, which makes the argument for improving the prognosis for stocks. The Swiss firm raised Indian equities from "underweight" to "benchmark," noting that the benchmark indices had room for growth of up to 14%.
Neelkanth Mishra, the head of research at the trading firm, predicted that the country will grow by 7% in FY24 as opposed to the mainstream forecasts, which predict actual growth to fall below 6%. Mishra told reporters that while the brokerage's analysis considered a wide range of data to arrive at its conclusion, the consensus predictions were based solely on official data.
Mishra said growth in dense fuels - which is typically below real GDP growth as fuel efficiencies go up - is over 4% per annum for the last three years. Similarly, revenue growths of the BSE500 companies also point to a faster growth, he said.
“We are expecting a stronger acceleration in India’s GDP growth in 2023 owing to several domestic drivers. Revival in government spending, increase in low-income jobs and easing of supply chain bottlenecks should partly offset the impact of rate hikes, a slowing global economy and the need to reduce the balance-of-payments (BoP) deficit,” he said.
He added, the risk factors continue to be dependent on imported energy, reliance on foreign capital and a slowing global economy.