Moneycontrol
Feb 07, 2018 03:27 PM IST | Source: CNBC-TV18

Comfortable with Nifty at 10k given earnings recovery, see over ten $100 bn firms in India in next 8 yrs

He thinks that over next 8 years, India is going through great phenomenon, doubling GDP and see market cap of anywhere between USD 5-6 trillion by 2020-25, which means lot of wealth would be created over that period.

CNBC TV18 @moneycontrolcom

It was an eventful start for the market in February as benchmark indices erased all January gains and brought things on ground. In fact, the euphoria has been taken away by the correction, giving an opportunity to look at fundamentally good quality stocks, is the word coming from Vikas Khemani, President & CEO, Edelweiss Securities.

The Sensex shed more than 2,000 points in the previous six consecutive days due to broadbased correction after one-way rally. Budget 2018 and inflation worries in the US as well as India caused selling pressure.

Khemani believes India story is intact despite current correction. "I am not overly worried about breakdown in market momentum. It might slow down mood or shift from 'buying on dips' to 'sell on rally' for sometime but that is part and parcel of market."

After great performance of the market in 2017 with 29 percent upside on the Nifty, 2018 looks little bit challenging from macro environment perspective, he feels.

"Given the fact that the Nifty EPS would be around Rs 580-600 levels, anywhere near 17-18 PE the market should be reasonably okay. And that is where lots of comfort would come in and that levels would be around 10,000 on the Nifty given the earnings uptick happening and sectors which have not participated in earnings growth in last few years will start participating," Khemani said.

This earnings recovery may provide lot of downside support to the market, according to him.

About strategy, he said, "Our approach always been build long term perspective, so that one can stay through the short term and always take long term bets that can stay long term."

He thinks that over next 8 years, India will go through a great phenomenon. GDP could double, and market cap can reach between USD 5-6 trillion by 2020-25, which means lot of wealth would be created over that period.

"What India did in 70 years, probably do in next 8 years. India will see over 10 USD 100 billion market cap companies against none currently," he said.
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