ETMarkets Smart Talk- Double digit earnings growth! Indian market likely to outperform peers in 2023: Rakesh Parekh

economictimes.indiatimes.com:

“We are trading close to the last 5-year averages of around 20x forward P/E. Our expected earnings growth will be around 15% CAGR in the next two years, which is clearly on the upswing compared to the rest of the world,” says Rakesh Parekh, MD and Co-Head, Portfolio Management Services, JM Financial Ltd. In an interview with ETMarkets, Parekh said: “We expect India to continue to relatively outperform its peers during the remainder of CY2023 and possibly beyond” Edited excerpts:We are seeing some nervousness at record highs for Mr Market. How do you see things moving – have we hit the top for the moment? It is true, that on absolute valuations, Indian markets have now crossed all-time highs, so we are at peak index level; hence, there is bound to be some nervousness amongst investors.

However, we are trading close to the last 5-year averages of around 20x forward P/E. Our expected earnings growth will be around 15% CAGR in the next two years, which is clearly on the upswing compared to the rest of the world. Hence, we believe strong investor interest in India would remain high.

As the run-up has been sharp since March 2023, especially for Mid & Small Cap names, we could also expect a breather in the short-term. Nevertheless, we expect India to continue to relatively outperform its peers during the remainder of CY2023 and possibly beyond. In case the US undergoes a stronger-than-expected recession, Indian markets would also come off, or we will have a time-wise correction.