India market rout may be over, could see new highs this year: Carnelian’s Vikas Khemani

India market rout may be over, could see new highs this year: Carnelian’s Vikas Khemani

India’s stock market may have already bottomed out and could touch fresh highs within this financial year, according to Vikas Khemani, founder of Carnelian Asset Advisors. Despite lingering global uncertainty, including tariff risks and volatile oil prices, the domestic investment case remains strong, he said in an interview with N Mahalakshmi on The Wealth Formula.

“I think the bottom is behind us,” Khemani said. “Even through the crisis, I was saying that it’s unlikely that the market will break 22,000 on the Nifty, because that’s where a lot of comfort comes. That’s where valuations start playing on your side.”

Khemani downplayed the near-term earnings season, saying Q4 results are expected to be largely in line. “There’s nothing major expected, but it’s not going to be a washout either,” he said. He cautioned that the June quarter may see some disruptions due to tariff-related uncertainty and inventory losses, but expects earnings momentum to return from the September quarter onward.

Markets have remained volatile following US tariff announcements, but India is relatively insulated, he argued. “It is neutral to marginally positive, to India. India tends to lose only in circumstances where its tariffs are higher than competing nations like China, Vietnam or Mexico, which is unlikely.”

On retail investor sentiment and how that will impact momentum going forward, Khemani said sentiment has weakened, especially among those who entered during the peak. Many stocks are down 40–50%, even as the index has corrected just around 20%, he noted. “You end up putting a lot of money at the peak in fads… and as a result, your portfolios are bleeding far more than markets.”

However, seasoned investors are deploying capital and see this period as an opportunity. “This vintage, according to me, will be again a great vintage to have. The India story continues to remain one of the best wealth creation stories around the globe.”

With the RBI maintaining a pro-growth stance and interest rates expected to moderate, Khemani is optimistic about a broad-based rally. “Sectors like banking and all those things look very good, which will lead the rally,” he said. “We could hit a new high this financial year.”