With strong balance sheets, corporates and banks are well-positioned to weather upcoming economic shocks
| Photo Credit:
Deagreez

Canara Robeco Mutual Fund expects that markets will recover in the next 3-4 quarters as corporate earnings growth rebounds driven by key bank rate cut by the RBI and an uptick in consumption.

Shridatta Bhandwaldar, Head – Equities, Canara Robeco Asset Management Company, said that markets are currently in a cyclical downtrend due to weak corporate earnings, and this will reverse in 3-4 quarters as the balance sheets of both corporates and banks are robust to tackle any economic shocks.

Consumption across sectors will be stimulated by the income tax relief provided in the Budget, which comes into effect from April, and a lending rate cut by banks, he said.

Corporate earnings were impacted by reduced government infrastructure spending in the second half of the last fiscal and the RBI’s tightening of norms on unsecured lending, he added.

The Central bank has already eased NBFC lending norms, and government spending is expected to revive. Expectations are that corporate earnings will touch 10-12 per cent in the coming months, said Bhandwaldar at the launch of Canara Robeco’s new fund offer on Multi Asset Allocation Fund, which opens for subscription on Thursday.

The active asset allocation fund will invest 65-80 per cent in equity, besides 10-25 per cent each in debt, gold and silver ETFs.

The fund will have a focused portfolio of 35-40 equity stocks across sectors and market-caps with a larger tilt towards large-cap.

Published on May 8, 2025