Recovery strong; a quarter before we know if booming markets will sustain: Kumar Birla

In his annual epilogue, Kumar Mangalam Birla, Chairman of Aditya Birla Group, says it is an open question how much 'froth' is there in the euphoric financial markets. It will need another quarter or so to confirm whether this booming trajectory is here to last. Referring to recent bull run in the markets, he says "economists are now searching for alphabets that will adequately describe this trend of cautious optimism".

In his latest note titled '2020-21: My Reflections', the chairman of the Aditya Birla Group says that after the COVID-19 outbreak there were prophets of doom predicting irreversible shifts in consumer demand and the evisceration of sectors but there has been recovery across sectors. Citing the example of Airbnb IPO, he said that the successful listing of the American vacation rental platform belied earlier predictions that travel was dead in the near future.

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In India too, he says that although the initial prognosis and narrative of experts proved to be excessively pessimistic, the country has witnessed strong recovery across manufacturing sectors, cement to paints, and automotive to aluminium.

"However, how much froth there is in the euphoric financial markets is still an open question. Perhaps, we still need another quarter or so to confirm that this booming trajectory is here to last. The economists, I am told, are now searching for alphabets that will adequately describe this trend of cautious optimism," he says.

Birla further states that the economic recovery has gained pace in recent months as indicated by most of the key indicators. Giving out details, the industrialist says that several indicators, including GST collections, electricity demand, railway freight movement, and passenger vehicle sales have reverted to positive growth numbers in recent months.

Also Read: 'Volatility is froth', focus on core economic, business variables: KM Birla

Birla further adds that although the COVID-19 pandemic struck and brought devastation, it was energising to see corporations - large and small - joining the collective fight against the tiny, invisible enemy.

"We have started the New Year with a strong sense of hope and optimism. This is not just because of the success in speedy development of the vaccine. It is also to celebrate, for having endured, survived, and overcome the challenge of a grave pandemic. The yearlong response to the pandemic, across the globe, exhibited all that is noble and uplifting in the human spirit," he says.