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Nilesh Shah says India's long-term growth story remains good, valuations fairly priced


Nilesh Shah of Kotak Mahindra AMC believes valuations in the market are fairly priced. He is also positive that India's long-term story remains good.

Market veteran Nilesh Shah said in an interview to CNBC-TV18 that he believes India's long-term growth story is "still very good". He also said that valuations in the market appear to be fairly priced at the current juncture. His remarks come at a time when headline indices have halted their nearly one-sided, 18-month-long rally.
“Right now valuations are fair. It’s neither expensive like they were in 2008 beginning nor cheap like they were in March 2020. They are fairly priced. If there is a correction in the market because of various events, increase equity allocation. If there is a rally in the market, book some profit,” he said.
Shah, Group President and Managing Director at Kotak Mahindra Asset Management Co, believes one needs to bet now on companies that have access to deep pockets.
“You need to bet upon a person or a company which has access to deep pockets of capital. If your capital is not infinite then certainly you won’t be a winner,” Shah said.
The veteran money manager advises investors to follow the asset allocation process now, and make income minus savings equal to expenditures.
Inflation is under control in India, said Shah.
Retail inflation accelerated to 4.48 percent in October from 4.35 percent in the previous months as food prices rose.
The RBI is scheduled to reveal the outcome of its scheduled policy review on Wednesday. A majority of respondents in a CNBC-TV18 poll expect the central bank to raise its consumer inflation forecast for FY22 from 5.3 percent to 5.4-5.6 percent.
The Street remains divided on whether the RBI will hike the reverse repo rate -- the rate of interest at which it borrows funds from commercial lenders -- to see the impact of the new COVID variant, Omicron.
Seven out of 10 economists polled by CNBC-TV18 believe that uncertainty around the impact of Omicron could reinforce the RBI’s 'wait and watch' approach.
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