Current valuations don't reflect underlying economic reality: Ambit Capital

Interview with Saurabh Mukherjea, chief executive officer, and Prashant Mittal, strategist, at Ambit Capital

It was a roller-coaster week for the markets, amid talk of a fiscal stimulus by the government. Saurabh Mukherjea, chief executive officer, and Prashant Mittal, strategist, at Ambit Capital tell Puneet Wadhwa the recent flows into equity mutual funds are largely speculative in nature and pose a risk of reversal. Edited excerpts:
 
Your recent report expects economic slowdown to worsen. Will you change your view after the government’s stimulus measures?

Mukherjea: In the first quarter of 2017-18, government spending grew 30 per cent. So, the government has — correctly, in our view — already tried to stimulate the