Daily Voice: Nifty at 28,000 by year-end? This founder backs India as global tensions, FPI flows align in its favour

No, they won’t ease anytime soon, which in turn makes India more attractive. There have been record redemptions from US equity markets, and FPI flows are turning positive for India. Though it's unfortunate that there are ongoing territorial conflicts, we are fortunate not to be directly involved in any such skirmishes. Tariffs, meanwhile, continue to act as volatility-inducing factors.

What is more surprising is that US inflation didn’t rise as some had anticipated due to tariffs. This is strengthening the voices within the Trump administration calling for Federal Reserve rate cuts, a move that supports higher P/E ratios and ultimately favours growth over value.

Do you see any major triggers that could drive markets to new highs and help them end 2025 with 10–15% gains?

There are several. For instance, the shift in FPI flows towards India, rising retail investor participation in capital markets, new AMCs entering India to launch mutual funds, the Rs 2.5 lakh crore dividend by the RBI helping the government meet fiscal targets, Rs 2.5 lakh crore from CRR cuts, Rs 1 lakh crore in saved taxes, lower oil prices (for now), increased government spending, and stronger regulations — all support a positive outlook.

While we can't say if the gain will be 10%, 15%, or even higher, what’s evident is that several macro factors are favouring markets. Corporate earnings have been mixed, and some stocks are trading at elevated valuations, hence, stock selection remains critical. That said, I wouldn’t be surprised if the Nifty 50 touches 28,000 levels before the year-end.

Are you maintaining a bullish view on NBFCs, especially after the recent RBI policy move?

Yes, this development could widen net interest margins (NIMs) for NBFCs as their wholesale borrowing costs may decline. However, they still carry riskier credit exposure. The key lies in the recovery of loans, not merely in disbursing them. The RBI has plugged several regulatory arbitrage gaps, particularly for larger NBFCs, putting pressure on their business models.

Among NBFCs, we prefer those focused on gold loans. The collateral value has increased and being secured loans, they have a significantly better recovery outlook than unsecured credit.

Is it advisable to avoid stocks with significant exposure to the US market for now?

I don’t think so. Services, including IT services, remain unaffected. In goods, pharma carries the most risk from tariff-led business disruptions, but I doubt the US would want to endanger its medical supply chains. As for other exports, Indian goods mostly serve premium brands in sectors like apparel and construction materials — areas where demand is relatively insulated from tariff-induced price hikes, unlike in China or Vietnam.

What is your outlook on tourism, hospitality, and healthcare sectors?

A weak rupee supports both tourism and hospitality. In addition, rising per capita income is driving growth in these sectors. These industries are also major employment generators, for every Rs 100 invested, nearly Rs 50 goes into job creation. That’s why I believe the government will prioritise these sectors over others like organised retail, which, while impactful, offer less in terms of employment and soft power gains.

Do you see a possibility of a spike in oil prices, which have supported Indian equities in recent quarters?

This is, in my view, the biggest short-term risk. A spike in oil prices could derail India’s relatively moderate inflation trajectory. Moreover, monsoons are currently 33% below normal. If this trend continues, it may result in food inflation due to poor crop yields.

While low oil prices don’t directly support equities, they help keep government bond yields low, which in turn benefits high P/E stocks. If oil prices rise unexpectedly, we may see value stocks outperform growth ones due to heightened inflation expectations. It’s essential to keep an eye on incoming data. Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.