Sanjay Mookim of Bank of America Merrill Lynch says while the GST (goods & services tax) should be beneficial in the long term, it will likely disrupt the economy during the transition period.
At a 17x 12-month forward P/E, Sensex valuations are nearly 15 percent above the long-term average and are likely ignoring this disruption, it feels.
Coupled with the residual impact of demonetisation, Sensex consensus earnings are likely to be cut by 6-8 percent over FY18-19, Sanjay Mookim says.
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