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Predictions 2006

SMART FEATURE/ TORCHLIGHT

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Ashok Kumar New Delhi
Last Updated : Jan 28 2013 | 5:35 PM IST

Year to March

FY05

FY06E

% FY07E

EPS Growth (%)

37.50

17.60

16.30

P/E (x)

19.80

16.80

14.50

P/BV (x)

4.40

3.80

3.20

Div Yield (%)

1.50

1.60

1.80

Net Debt/Equity (%)

11.70

5.30

2.50

EV/EBITDA (x)

10.80

9.30

8.00

 Amid this, the Foreign Institutional Investors (FIIs) also begun to position India as an alternative investment destination to China resulting in an unprecedented inflow of foreign funds.  Mega-public issues like Jet Airways and ICICI BANK also brought in huge foreign money although it is the medium sized new issues which gave extra-ordinary retuns post-listing.  How will 2006 pan out? With Japanese and Korean FIIs being the latest converts into the Indian market, chances of a 360 degree reversal appear bleak. At the same time, it would be unrealistic to expect the markets to continue to steam ahead at the same pace.  The potential party-pooper which raised its head, albeit in a hitherto benign manner, remains rising crude oil prices. The chances of recoil with a lethal backlash cannot be entirely ruled out.  After all, all good times and things have to send at some point in time. Yet, the estimates in the table below suggest that the party may still last some while, although it must be mentioned that these estimates are based on a set of assumptions, that are unverifiable, for now.  Another asset class to watch out for in India is Real Estate. With rapid all-round development and huge foreign funds likely to flow in this direction in the year ahead, it could well be the asset class that performs best in India in 2006.  To conclude, there is a lot happening in India which is fast emerging as a market that international investors cannot afford not to have exposure to in their portfolios. The proverbial million dollar question that arises though is

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First Published: Jan 09 2006 | 12:00 AM IST

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