“Nifty50 index is trading at about 22-22.5 times on a forward basis, so clearly a lot of good news is priced in,” said Sanjeev Prasad, managing director and co-head of Kotak Institutional Equities, in an interview with CNBC-TV18.
“For our own earnings forecast, we are looking at about 31 percent growth in profits of Nifty50 for FY22,” he added.
He sticks to the base case that inflation will be on the higher side for the next few months but will come off subsequently, which means central banks need not be in a big hurry to raise rates.
According to him, the audience is moving away from cable and satellite to OTT platforms. There is a lot of content available these days. The amount of content available is exploding, he shared.
He has been negative on most of the media companies. “I don’t think they have the capacity to sustain the onslaught from the OTT platforms,” he said.
In terms of auto production linked incentives (PLI) schemes, he believes that if the PLI schemes work, it can have a pretty large impact on the world economy. “The whole idea is to result in more manufacturing of things, which are not produced in India currently, with the big focus being on batteries of electric vehicles (EVs). If these PLI schemes work well, it will be a combination of whatever incentives the government has for automobiles. If we can make a move towards solar energy, which in turn can be used to power all our EVs going forward, that will have a massive impact on the entire economy,” he mentioned.
He believes, average revenue per user (ARPU) will have to go up over a period of time. “It has tested people’s patience. The stock price is now finally factoring in effectively a two-player market,” he said.
For the full interview, watch the accompanying video.