Susmit Patodia, Associate Director and Fund Manager at Motilal Oswal AMC, shared his views on how interest rates make narratives and discussed fundamentals of the market.
"There are two aspects to interest rates. One is that they feed into the valuation and second is they also make it easier for non-cash generating companies to survive,” he said.
“They are both connected. One is how you run a business and second is how you value the business but both have very big upsides when the interest rate fall and the reverse happens when the interest rates start going up,” he added.
On IT sector, he stated, “The industrialisation of cloud has just begun and COVID-19 has accelerated it. Whatever conversations we have with experts or whatever we read, we realise that the cloud journey is only 30-40 percent done till now, so we still have a long way to go. You need someone to configure it for you and that is where Indian IT comes in. Indian IT will continue to be the office for the world.”
In terms of earnings, he mentioned, “The biggest positive surprise has been corporate earnings be it in India or anywhere in the world and that will continue to be very strong for the next few quarters. I think markets will always be happy with earnings for the next six-nine months."
For more, watch the video