India's earnings growth over the next three years set to exceed the last decade average substantially, according to the 'Sense and Sentiment Report: Envisioning 2022 and Beyond' by YES SECURITIES, a wholly owned subsidiary of YES BANK.
YES SECURITIES envisages Nifty to hit 21,000 by 2022 and 32,000 in 2025. With abundant liquidity to keep equities in the reckoning and growing institutional participation in the Indian markets, India is expected to continue gaining share in the emerging markets basket.
Household consumption will increase in the next four years to 46% with household savings at 19% of GDP increasing quantum of disposable income to be spent on consumption. India's demographic dividend will bolster this consumption with India's young population highest among top 10 economies in the world. Gig economy will see a huge uptick with over 80 million jobs expected to be added in this decade and the contribution to GDP rising to as high as 10%.
Interestingly, consumption will not be dented by inflation. YES SECURITIES research sees tell-tale signs of consumption revival on both ends of the spectrum - higher agricultural production to deal with food price pressure and increasing average monthly spend per credit cards in India.
Earnings season will boost the growth of the economy with most troubled sectors out of the woods. The report entails reasons for trouble and the new reality of sectors like Telecom, Capital Goods, Pharma, Banks, Asset Management, Real Estate, Cement, Discretionary, Building Materials among others.
While global markets impact the Indian outlook, YES SECURITIES team predicts that US Taper Tantrums will not spoil the party. Rise in the cost of capital will be extremely gradual with FED normalizing ultra-cheap monetary policy. Indian trends are expected to follow the global benchmark.
YES SECURITIES has also shared the Top Stock Picks for 2022 in the report: