New Delhi: Two major negatives about India's otherwise promising growth story are high interest rates and rise in wages, say research analysts of global financial services major Citigroup.
Managing Director and Head of Asia strategy for Citi Markus Rosgen and India Equity Research Head Ratnesh Kumar said that with multiple growth drivers of big investment cycle, rapidly increasing domestic consumption and growth in outsourcing, India is poised to take a big leap.
They were talking to reporters alongside the Citigroup India Investor Conference in Mumbai on Wednesday.
However, they showed concern about rising interest rates and wages, which could affect the growth in the short term.
According to Ratnesh Kumar, the Sensex could be in the region of 14,700 by the end of the current year and sectors like IT services, telecom, consumer non-durable, media etc are expected to do well.
As per analysts, though interest rates would eat into the profits of the companies, it would not affect capital expenditure plans.
For the last five years, Corporates were growing at over 25 per cent cashing in on the cost-cutting measures they adopted earlier. But going ahead, they could grow by 15 to 20 per cent.
The wage inflation is another bigger issue affecting Indian companies that could throw some negative surprises.
It may not structurally damage the India growth story as the problem with Indian companies is not lack of employees but lack of properly trained employees, they observed.
The problem could be sorted out on its own if companies embark on massive training programes for the young employees, Kumar said.
(With inputs from PTI)
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