Marcellus Investment Managers on Thursday said Narendra Modi government's bold steps can revive corporate India's business confidence.
In an interview to CNBC-TV18, Pramod Gubbi, founder, said, "I think the key to market movement will be the recovery in the underlying fundamentals. Earnings growth has been quite elusive for quite some time now. Of course, there are specific sectors and stocks which have demonstrated that there is growth. However, at the index level, you are seeing that gap opening between the prices and earnings. So, either of two things needs to happen, one is either the earnings will have to recover for this rally to sustain or the price will have to adjust factoring in lack of earnings recovery."
"Long term reforms are not likely to boost growth in the short term. These are typically reforms which will take time for it to reflect in terms of on the ground changes in terms of growth coming through. Typically kick-starting an investment cycle comes with a lag in terms of impact on earnings and markets and so on. Specifically, we have already seen the land acquisition bill which was tabled in 2015 which never saw the light of day again, that can be brought back," Gubbi said.