PE de-rating will take place in the Indian market: Deven Choksey

Deven Choksey, MD, KR Choksey Securities in an interview with ET Now talks about his outlook for the market.

What about equities?

In case of equities, in our market, the situation is little bit different comparatively because of reduction in the growth itself. Finance Minister also reiterated that fact. After the RBI policy, the growth rate is likely to come down and should it come down, then possibly corporate earning growth which was earlier projected at around 18% at the beginning of the year may very well come down to 15% to 16%. So to that action, the PE de-rating has to take place into the market and that is what the FIIs are doing.

I see a pressure building on and probably for the need to generate cash, they are selling into the market. Otherwise, fundamentally we all know that it could land the bottom line pressure to most of the companies and with a slowdown probably, some of the companies may have the top line problems also.

So it is going to be a tricky situation going forward though the impact may not be seen in the first quarter or may not be seen largely in the second quarter. You could possibly see the larger impact coming in the second half of the financial year which was not anticipated earlier in the beginning of the year.