Economy

DSP Mutual Fund thrilled over FM’s corporate tax rate cut move

KR Srivats New Delhi | Updated on September 20, 2019 Published on September 20, 2019

Fiscal stimulus a clear sentiment-booster for markets, says Singhania, Co-head of Equities

The government’s mega booster dose of corporate tax rate cut is a “super exciting” move that will benefit most of corporate India, Rohit Singhania, Co-head of Equities at DSP Mutual Fund, said on Friday.

The main question now is whether the companies will pass on the benefits of the corporate tax rate cuts to the consumers by reducing their product prices, Singhania told BusinessLine here.

DSP Mutual Fund’s equity assets under management (AUM) stood at ₹41,516 crore as of end-June 2019, ranked 10th in the fund house pecking order in terms of equity AUM.

“I feel this (corporate tax rate cut) should to some extent prompt companies to bring down their product prices. They should be looking from this angle also. Logically, this should be done. Only time will tell what they end up doing,” he said.

Singhania said this was good for the equity markets. “Now we have to look at what the companies will do, what does this do for longer-term demand. How does demand come and is there anything for the consumers? This has to be seen. I am not sure about this,” he said.

The move to cut the corporate tax rate will boost the country’s export competitiveness, he added.

For the current fiscal, DSP Mutual Fund is looking at earnings growth of 17 per cent for Nifty 50 companies. In the next fiscal, the fund house is looking at 21 per cent earnings growth for Nifty 50 index. The fund house will, in the next few days, reset upwards the Nifty targets, he said.

“The latest booster dose has certainly improved the sentiments in the equity markets, and enhanced corporate optimism. We have to see what it does to demand. This could provide a fillip to manufacturing,” he said.

Published on September 20, 2019
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