It took six years for Sensex to double, i.e. from 25,000 points to 50,000 points, when do you see it hitting 1 lakh points?
We expect a doubling of our nominal GDP over the next 5-6 years and Indian corporate earnings will double a little earlier. Also a lot of newly listed companies will grow faster and contribute to wealth creation.
It would be advisable to look at a broader spectrum of corporates than a narrow index like Sensex.
RBI governor once again said that the stock markets have a major disconnect with the real economy. What is your take on this?
Stock markets reflect the future of the economy and the corporates. So they are a lead indicator most of the times. Having said that, during the last 9 months of the recovery post covid fall, the listed corporates – typically more organised space and listed space seem to be doing better than the un-organised sector, MSME etc., which are typically unlisted, and gaining market share. The pain in the smaller segments is receding, albeit slowly.
So there does appear to be a disconnect between the listed peers and the rest, in a broader sense.
How are you feeling about Sensex reaching 50,000. What will change from here?
There is a feel good definitely about the future. A crisis has triggered a coordinated action amongst global central banks and governments. India has also seized the opportunity in this time of crisis to unleash the next set of reforms and favourable policies to help the industries, investment climate and job creation.
While corrections and volatility is the short term is a part of market behaviour, we feel that it is the start of the next phase of economic expansion in India.
Investors with a long term perceptive should continue to invest systematically into equities.
