Equities offer best risk-reward in current environment: Validus Wealth CIO

Downgrades to EPS growth forecasts and hyper-inflation are the biggest risks for Indian equities, says Rajesh Cheruvu, chief investment officer, Validus Wealth. He tells Ashley Coutinho, in an interview, that a quicker-than-expected reversal in easy monetary conditions could sap the liquidity that has elevated asset price valuations. Edited excerpts:

What are the biggest risks for the Indian equity market right now?

Equity markets are always forward looking and tend to move on from transient economic disruptions quickly. But when valuations are as stretched as at present, corporates have no space for mistakes in business performance and earnings delivery. Though the two-year forward