Opportunities for private capex have shrunk’

SANJEEV PRASAD, MANAGING DIRECTOR & CO-HEAD, KOTAK INSTITUTIONAL EQUITIES

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Sanjeev Prasad, managing director and co-head, Kotak Institutional Equities, believes consumption demand could taper off after the current bump because private capex is slow and not enough jobs are being created. Prasad tells Shobhana Subramanian that the risk appetite for capex has fallen. Excerpts:

How do you read the market?

It looks like the market will be range-bound for some more time, with a high floor and a low ceiling, setting aside any major geopolitical events. I am more positive now than I was some time back because earnings seem to be stabilising and FY27 will be a decent year unlike in FY26 when we have seen a lot of downgrades. Valuations are still high but I have more confidence in future earnings growth. So, my view now is more neutral to positive.

The Nifty trades at 20x estimated FY27 earnings...

Yes, that is not so bad. It has taken a year or so for valuations to come to slightly more reasonable levels. I am getting confidence the worse may be over for earnings downgrades. The same time last year for the Nifty 50 EPS, we were looking at 1,250; that is now 1,085. For FY27 we were looking at 1,420, that is now 1285. I am more confident FY27 earnings can come through unlike for FY26 when I was worried. The economy is growing and we could see nominal GDP at 10% next year. Of course, it is all subject to global factors etc.

Will consumer demand sustain post the bump since few jobs are being created?