Sahil Kapoor of DSP Mutual Fund said bonds look attractive as India’s real yields remain strong, with the 10-year G-sec at 6.65% and real yields near 5.4%. He noted that even after adjusting for core inflation below 4%, investors still earn about 2.5% in real terms. Kapoor highlighted the slowdown in nominal GDP, which has fallen from 14% in the 2000s to 10% in the 2020s, with recent readings below 9%. Corporate sales growth is only 7.5%, making it difficult for companies to deliver 20% profit growth, and valuations at 25 times earnings look stretched.
