Summary
Fundamentals of the Indian Economy are intact. Temprorary withdrawal of funds has happened. GDP is still expected to grow at 6% in 2009 and reach 10 percent in 2011. India needs large amount of funds, which would give sustainable returns and growth. Nation is stable. Current account deficit is temprorary, particularly in 2008 because crude touched $147 a barrel at one time. Now it has stabilised at about $50- it is a bullish factor for the Indian Economy. Growth shall be strong in Motor Vehicle Industry, Steel, Banking & Services. No where else this sustainable/stable growth is possible. China, largely dependent on exports to USA shall be volatile, directly linked to revival in USA . It may not be a big competitor to India, for PE investors. India has young population, english speaking, very good at software services, banking. Moreover Indian Economy serves and depends on internal demand to the tune of 90%. Economy is slowly, but surely becoming competitive.
Analysis
As PE returns and India moves forward with greater speed, higher growth rates in months to come the following industrial leaders stand to benefit
Transportation/Motor vehicles: Specifically Hero Honda; Tata Motors
Auto ancilliary: Specifically Rico Auto(MAGNA PARTNER);Bharat Forge
Steel: Specifically TATA STEEL
Banking: Specifically State Bank;IOB;PNB;Canara Bank
Services: Infosys; TCS
This is the general outlook. Investors off course must do homework,chose proper timing, consult their Investment Advisors before investment. Stock Market or for that matter Investment Mangement is a scientific exercise and expert counsel is necessary.
