Current market offers a great accumulation opportunity; concerns over IT sector overblown, says Karan Doshi of LIC MF
Given the longer-term growth story of Indian markets and current reasonable valuation levels, investors have an opportunity to accumulate quality stocks at the current juncture, said Karan Doshi, Fund Manager and Senior Equity Research Analyst of LIC Mutual Fund, in an interview with Mint. He underscored one should invest in companies with good corporate governance, a healthy balance sheet, strong growth potential over the next three to five years and valuations at reasonable levels. Edited excerpts: Indian economy is at an inflexion point that marks the start of a new virtuous growth cycle.
I believe that in the medium to long run, the confluence of demographics, productivity and globalisation will be structurally supportive of a higher growth rate. A combination of strong Marcos (healthy GDP growth, peaking out of inflation and interest rate cycles, robust external balance, etc.), stable micros (decent FY23 corporate earnings, expectation of mid-teen earnings growth in FY24 and correction of commodity prices) and recovery of flows.
India is also benefiting from the fact that post-Covid-19, the world is looking for an alternative to China as a global manufacturing hub. This has expanded the addressable market opportunity and improved the growth prospects for various sectors in India such as pharma, chemicals, textile, and manufacturing across electricals, electronics and engineering products.
Given the longer-term growth story of Indian markets and current reasonable valuation levels (particularly considering the top of the rate cycle) the current phase of the market may be a great accumulation opportunity for the investors. Market valuations based on Bloomberg consensus are reasonable at 20-21 times one-year forward PE
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