Saurabh Mukherjea, founder of Marcellus Investment Managers, believes 80 percent of companies don't compound at the rate of inflation.
"The thing to focus on is not whether the economy is recovering or not but investors should focus on the strength of a franchise, its ability to grow earnings, its ability to protect itself from wider forced such as COVID, inflation and thus generate value for shareholders", he said.
He said, "We are at 7 percent CPI at the moment, I reckon we will push towards double digit inflation as the year progresses. Franchise which do not have competitive advantages will see their operating margin pressurized."
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