Daily Voice | This investment veteran forecasts 10-15% return in Nifty in Samvat 2080

Manish Sonthalia is the Chief Investment Officer at Emkay Investment Managers

The year ahead should be better for the equity markets in terms of Nifty returns, says Manish Sonthalia, chief investment officer at Emkay Investment Managers.

Sonthalia believes the Nifty returns should be more reflective of the earnings growth in Nifty EPS and which should comfortably be 15-20 percent.

Talking about concerns for the equity markets in an interview to Moneycontrol, the investment veteran with over three decades of experience in the financial services industry says top-down concerns on global and local macro fundamentals linger on the dollar index, interest rates, inflation, and state elections. Excerpts from the interaction:

Do you expect the oil prices, which boosted the recent recovery in the equity markets, to remain at current levels, considering the geopolitical tension and global economic environment?

It’s very difficult to say where oil prices will be given the geopolitical situation. At best it’s likely to be near the $75-80 range. At worst, it is likely to cross $100 a barrel.

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Manish Sonthalia

Chief Investment Officer|Emkay Investment Managers

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Do you expect the year ahead to be better than the year gone by, for the equity markets? Nifty gained 10 percent from last Diwali.

Yes, the year ahead should be better for the equity markets in terms of Nifty returns. Nifty returns should be more reflective of the earnings growth in Nifty EPS and which should comfortably be between 15-20 percent.

Also read: Samvat 2080 | Fund managers believe IT stocks will eventually radiate light

Do you think most risk factors are now known to the equity market and there will be no major concern from them going ahead?

There are always concerns for equity markets. Top-down concerns on global and local macro linger on the dollar index , interest rates, interest rates, inflation, and States elections.

Do you think India remains underinvested in global portfolios?

Yes, I would believe so. FIIs are not comfortable on India valuations from a short-term point of view.

Also read: Porinju Veliyath’s lessons from the 2017-18 midcap meltdown

Sectors that must be part of the portfolio on this Diwali....

Platform companies in consumption including retailing companies, energy, and financials must be part of the portfolio on this Diwali.

Is the Fed done with the interest rate hike cycle? Do you see a mild recession in the US?

There will be a recession in the US in CY24. I think there will be one more hike by the Fed.

What is your outlook for the second half of FY24 earnings after reading September quarter earnings?

Earnings are pretty strong for the second quarter of FY24. I think the same growth momentum is likely to continue in the second half of FY24.

Also read: HAL has broken the myth that investors can't make money in PSU stocks: Madhu Kela

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