Realty, manufacturing among top 4 sectors that will drive investment cycle in India

Index EPS CAGR grew only 3%. Financials and cyclical sectors are leading the upswing in earnings. Further, the Indian banking system’s gross NPL has dropped from 12% for FY 2018 to about 7% currently over the period of FY15-FY21. This should drive an uptick in industrial credit from banks. Low debt on the corporate balance sheet amid improving profitability and increasing credit offtake will create space for the next investment upcycle like 2003-2008.