Over 7% growth looks certain this year, but next year needs lower oil prices says Nilesh Shah

India’s growth momentum has continued into the second quarter, with 7% plus growth looking certain for the current year, according to Nilesh Shah, MD, Kotak Mahindra AMC.“This year 7% plus growth is looking certain, the momentum has continued in Q2,” Shah told CNBC-TV18.
He added that achieving 7% growth next year would require lower oil prices. Shah said the first-quarter GDP performance was good, but pointed to a 12% monsoon deficit, oil prices moving back into triple-digit levels and emerging supply-chain disruptions.

“We are at a scenario where we need to be very, very careful for maintaining growth,” he said. He also said inflation is rising, although it remains below the Reserve Bank of India's upper target range. According to Shah, this could mean interest rates will need to rise.
On the markets, Shah said IPO, QIP and OFS issuances have put pressure on markets. He said there have been more than $50 billion of issuances over the last three years. Shah said FPIs have sold ₹2.5 trillion in the current calendar year. He described the market as seeing a combination of “euphoria and apathy”, with a lack of interest in large caps, euphoria in mid- and small-caps, and apathy from FPIs.“Earnings are strong but on the other side supply is huge and future is looking little bit tense,” Shah said, adding that this is a time when investors will have to be “bottom up stock picker”.