The 7th edition of the CA Annual Equity Assessment 2022 has been launched by Client Associates, a private wealth management firm. The first edition of the CA Annual Equity Assessment was launched back in 2016. CA Annual Equity Assessment 2022 is an outcome of a comprehensive assessment of both the domestic and global economic factors.
The report has become a navigator in a world which has become even more unpredictable than what it was before. Like any other year, the CA Annual Equity Assessment report highlights that 2022 is also going to be an eventful one and the high levels of inflation in the developed world are going to define the shape of the market in 2022 to a great extent.
CA Annual Equity Assessment 2022: Key Highlights
1. As the Government of India demonstrates the continuity of growth-oriented stance with the Budget 2022, the current year is expected to be of good growth for the Indian economy.
2. Client Associates Equity Assessment Grid (CAE3) reflects a robust rebound in economic activities, healthier corporate balance sheets, strong earning growths, and the structural reforms that are likely to improve the value of the Indian businesses.
3. The reforms by the Indian Government and rebound in the economic activities will also continue the EPS growth in the FY2023 and the stable sectors such as IT, private banks, and consumers are likely to sustain the growth momentum.
4. India is also better placed in terms of the expected EPS growth and economic activities which means that the Indian market will continue to command some premium over historical valuations and global peers.
5. As the CA grid assigns the CAE3 score to the Indian equity markets as Neutral, the score can see the improvement over the short term if the earnings are upgraded more than the market expectations and/or if the market consolidates or declines from the current level despite the strong fundamentals.
Domestic Economic Cycle
The period from FY2015 to FY2020 has witnessed a slowdown in India’s economic activity from 8.3% in FY2017 to a pandemic induced 7.3% contraction in FY21. The pace of the domestic growth averaged a weak 3.5% growth on account of the faltering private consumption demand and weak industrial output.
However, the strong government spending, effective policy measures by RBI are likely to support the strong economic activities in FY2023.
| Annual GDP Growth Rate (GVA at basic prices) | FY 2017 | FY 2018 | FY 2019 | FY 2020 | FY 2021 | FY 2022E |
| Agriculture, forestry & fishing | 6.8 | 6.6 | 2.6 | 4.3 | 3.6 | 3.9 |
| Mining & quarrying | 9.8 | -5.9 | 0.3 | -2.5 | -8.5 | 14.3 |
| Manufacturing | 7.9 | 7.5 | 5.3 | -2.4 | -7.2 | 12.5 |
| Electricity, gas, water supply & other utility services | 10 | 10.6 | 8.0 | 2.1 | 1.9 | 8.5 |
| Construction | 5.9 | 5.2 | 6.3 | 1.0 | -8.6 | 10.7 |
| Trade, hotels, transport, communication and services | 7.7 | 10.3 | 7.1 | 6.4 | -18.2 | 11.9 |
| Financial, real estate & prof services | 8.6 | 1.8 | 7.2 | 7.3 | -1.5 | 4.0 |
| Public Administration, defense and other services | 9.3 | 8.3 | 7.4 | 8.3 | -4.6 | 10.7 |
| GVA at basic prices | 8.0 | 6.2 | 5.9 | 4.1 | -6.2 | 8.6 |
| Net taxes on Products | 11.7 | 13.3 | 13.4 | 3.1 | -18.4 | -16.2 |
| GDP | 8.3 | 6.8 | 6.5 | 4.0 | -7.3 | 9.2 |
About Client Associates
Client Associates is a client-oriented private wealth management practice. It helps its clients in managing their wealth in the most effective manner. The firm provides its focused attention and understanding of the wealthy families in India.
Client Associates has a track record of building efficient portfolios across the market cycles along with offering unbiased and non-conflicted advice with the use of globally accepted investment processes.
Over the years, with the successful acceptance of Client Associates by their private clients and the goodwill, the firm has seen continuous growth.
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