Equity Market Outlook – Mr. Anand Radhakrishnan
Wed, Dec 20, 2017
Source : Yash Jashnani, Citrus Interactive

Mr. Anand Radhakrishnan is the Senior Vice President & Chief Investment Officer, Equities, at Franklin Templeton Asset Management Company (India) Pvt Ltd. and manages funds such as Franklin India Bluechip Fund (labeled as Moderately High Risk), Franklin India High Growth Companies Fund (labeled as Moderately High Risk) and Franklin India Prima Plus Fund(labeled as Moderately High Risk). Mr. Radhakrishnan has been in the investment management industry since 1994. Prior to joining Franklin Templeton he has previously worked with Sundaram Mutual Fund & SBI Funds Management Ltd. Mr. Radhakrishnan is a Bachelor of Technology with specialization in chemical engineering from Anna University, Chennai, a Post Graduate Diploma in Management from the Institute of Management, Ahemdabad and a Chartered Financial Analyst from the CFA institute. 

What is your view on the Capex Trends?
The year on year growth in investments is improving. The private capex could recover led by improving the balance sheet fundamentals and strengthening the financial system. Slowdown in the growth of few sectors such as RealEstate, Mining & Agriculture have contributed in a modest growth of the capex. The government spending on the capex has been increasing year on year v/s the private spending. The government spending has increased from 21% to 25% year on year. (Source: CLSA – August 2017 (latest available); MOSL- Eco state budget report, April 2017)
The government tackling the Non-PerformingLoans issues can augment the credit growth and support the capex.  The introduction and execution of stringent reforms measures would aim to provide a faster NPL resolution which in turn becomes imperative to enable the capital to flow freely in the productive private sectors which could support the growth in capex and investments. In our view, the real long-term positive for the PSU banks to be effectively competitive in the market, could be to reform them internally and make them more autonomous with greater result orientation.

Which Sectors are you Overweight on?
Currently, consumption is a key growth driver. Post demonetization and GST the auto sales have picked up. In our view we are positive on the auto sector. We are also bullish on sectors like IT & Pharma.
Do you think the FII & DII Flows will continue to be strong in 2018?
The capital flows during the last one year have been supportive, led by the Domestic Investors. We positive on the DII Flows.
How do you think will the Inflation Trajectory pan out?
Moderate inflation trajectory expected. The inflation trends are firming up, though they are below the 10 year average.  The inflation risks can emanate from the 7th pay commission payouts at state level and the possible second round effects from them. Rising crude oil prices could also risk the rising inflation level.

What is your view on the earnings and markets?
The FY2018 estimated Earnings Per Sharegrowth is expected at 9.9 % and FY 2019 for Sensex stands at 28%. Steady earnings growth recovery expected in FY2019. There is transient dip in the capacity utilization but a supportive Return On Equity. The BSE 100 index ROE Levels showed an uptick from the recent bottom, even as the capacity utilization saw a transient dip tacking the county’s industrial activity which had contracted post the GST roll out.

What are your views on Franklin India Prima Plus? Any specific changes that you plan to make in its portfolio?
Franklin India Prima Plus has been positioned as a multicap fund. We do not plan to make any specific changes in the portfolio. We plan to reduce the midcap and the private banks weightage in the portfolio. The allocation towards the PSU bank could remain the same in the portfolio.

Disclaimer : Mutual Funds are subject to market risk. Please read all offer documents carefully before investing.

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