India growth story stays intact

The Indian market experienced some sell-off in April and May as concerns over the sovereign debt crisis in Greece reappeared, but has since posted a solid recovery helped by strong economic data and evidence that the Reserve Bank of India will continue with its ‘pro growth' stance by modestly increasing interest rates.

Sam Mahtani, Director, Emerging Market Equities at F&C, believes the current economic recovery in the region can be sustained for at least 18-24 months as long as inflation remains under control.

"The growth story in India remains intact with GDP expected to be 8% this year and a real chance that India overtakes China in GDP growth terms within the next 2 years," he commented.

In this environment Mahtani is sticking to high quality, larger company names with an emphasis on balance sheet strength and earnings reliability within his four key themes - financial services, automobiles, pharmaceuticals and IT services - such as Bajaj Auto, State Bank of India and Infosys.