The Indian market has performed strongly over the past 20 years and can potentially deliver a 16-20 percent return over the coming three to five year, Carnelian Asset Advisors LLP founder Vikas Khemani has said.
On July 3, the Nifty 50 hit a new all-time high of 19,336.10 in the early trade.
In an interview to Moneycontrol, Khemani called India a “financially prudent country” with a good current account and fiscal deficit and strong micros as well as macros. The economy is riding on a corporate profit cycle with sectoral indices recovering growth, he said.
Recapping the Nifty's performance over the past 20 years, Khemani said, “In 2003, the Nifty was at 800 points. Today, it is trading around 19,000 points. This shows that the market has grown over 22-23 times over the past 20 years.”
"We are in the middle of the corporate profit cycle," said Khemani. "We are currently devoting 4-4.5 percent of corporate profit towards GDP, while there is a strong possibility that in the near future we kick out at nearly 7-8 percent."
Watch the full interview with Vikas Khemani here
Amid mixed analysts' mixed views on the continuation of the current run -up, Khemani is bullish on the Indian markets and expects the next three-five years to be robust.
The Indian market has successfully survived the UPA 1, UPA 2, global financial crisis, CG scam, coal scam, ILFS scam, demonetization, covid and a lot more, he said. The power of the Indian economy, driven by a strong demographic profile, helped the markets deliver an average 17-18 percent compound annual growth rate (CAGR) return over the past 20 years.
Despite the poor performance of the manufacturing sector over the past few years, the markets are fairly balanced with a focus on domestic consumption, exports, investments and financials, he said.
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