Birla Sun Life Mutual Fund expects the equity market to deliver a return of 18 per cent in this financial year compared to 6 per cent logged in FY17 with substantial rise in earning per share (EPS) of corporates listed on the exchanges.

Mahesh R Patil, co-Chief Investment Officer, Birla Sun Life MF said expectations of a pick-up in demand across sectors and increase in capacity utilisation on the back of banks cutting lending rates should boost companies’ profits and help them post better EPS.

However, he said the roll out of the Goods and Services Tax (GST) may send some tremors in the immediate quarter following its implementation but over a period of time corporates will get used to it and benefit from lower logistics costs.

A Balasubramanian, CEO, Birla Sun Life AMC, said the fund house has registered substantial increase in assets under management to ₹2 lakh crore with equity assets touching ₹67,000 crore. “We received about 18 per cent of inflows through Systematic Investment Plan,” said Balasubramanian.

The industry has received close to ₹96,000 crore net inflows in equity last fiscal.

Interestingly, of the total equity inflow, about 55 per cent was through monthly SIPs which essentially means that about ₹40,000 crore is assured even as more subscription comes in SIP, he added.

Not at alarming level

Asked whether the steady inflow into mutual funds through SIP would artificially boost the stock price with more money chasing fewer stocks, Patil said it may be theoretically true but the inflow has not reached that alarming level that warrants a concern.

In fact, he added the increasing participation of domestic investors has been acting as a cushion whenever foreign investors pull out money. In the December quarter, foreign investors have sold stocks worth $3.5 billion which would have dragged the market by 15-20 per cent but it fell by only 5 per cent as DIIs moved in to buy, he said.

Maneesh Dangi, co-CIO, Birla Sun Life MF, said the RBI’s concern on rise in inflation is unwarranted and the quick actions taken by the government are helping to keep inflation under control.

The trend of low inflation could be under threat only if exports revive, he added.

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