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HomeMarket NewsValuations reasonable, earnings stabilising: JPMorgan’s Sanjay Mookim expects near-term bounce, prefers consumer plays
Sanjay Mookim, Head of India Equity Research at JPMorgan, said recent policy measures such as tax cuts, goods and services tax (GST) rationalisation, and rate cuts could help revive consumer sentiment. However, he expects this improvement to reflect in earnings only after the September quarter.
Indian equities may see a short-term recovery as valuations become more reasonable and earnings expectations stabilise, according to Sanjay Mookim, Head of India Equity Research at JPMorgan.
“It looks like you could see a little bit of a bounce because expectations have been right-sized, earnings have been cut, and valuations for the Nifty are at a 10% discount to the S&P 500,” he said.
Mookim said the December–March period could see stronger performance from consumer-focused companies. He advised investors to look at consumer-oriented sectors in the near term, noting that “looking at more consumer-related stocks makes a lot of sense.”
He said auto and discretionary stocks are likely to gain more from price cuts and improving demand than staples.
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Discussing the broader market outlook, Mookim said India remains attractive in the long run due to urbanisation, manufacturing expansion, and favourable demographics, but foreign inflows may stay muted until earnings momentum improves.
He also cautioned that while markets globally may appear overextended, India’s corporate balance sheets remain healthy. “Unlike 2008, there does not seem to be a leverage problem in the corporate sector,” he said, though he noted higher government borrowing as a potential risk.
Mookim concluded that investors should moderate their expectations for index returns. “The higher the entry multiple, the lower the future returns,” he said, adding that double-digit gains from index ETFs may be unrealistic at current valuations.
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He also commented on the impact of the India-US trade deal, saying it remains an “overhang for markets” but its exact effect is difficult to measure. Mookim pointed out that global markets, including China and Korea, have rebounded strongly, and that India’s relative underperformance is partly due to rotation of funds into those regions.
For the full interview, watch the accompanying video
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