ETMarkets Smart Talk: India in a sweet spot; we expect higher allocations from FIIs in 2024: Alok Agarwal
“We expect much higher allocations from FIIs this year. India is in a sweet spot with clear visibility of growth and credible shock absorbers,” says Alok Agarwal, Head-Quant & Portfolio Manager, Alchemy Capital Management.
In an interview with ETMarkets, Agarwal said: “We expect domestic defence capex to be a structural theme for the next few years at least. Railways in India have been age-old and requiring attention,” Edited excerpts:
The market seems to have climbed all walls of worries to hit fresh highs in the first week of January 2024. But the voice is getting louder both domestic and global that these valuations are unsustainable. What do you take?
Alok Agarwal: The Nifty50 is currently trading at a one-year forward P/E ratio of 21.9x – this is about 24% premium to the last 10-year average valuations, although about 5% below the peak seen in Oct’21.
Unlock Leadership Excellence with a Range of CXO Courses
Offering CollegeCourseWebsiteIndian School of BusinessISB Chief Digital OfficerVisitIndian School of BusinessISB Chief Technology OfficerVisitIIM LucknowIIML Chief Executive Officer ProgrammeVisitThere is no doubt that if one were to infer these numbers alone, the valuations are on the higher side. However, there is more to it.
Interestingly, the sectors that have historically traded at premium multiples are the ones that are disappointing both in terms of earnings growth and market leadership, while cyclicals are performing well on both fronts.
Modest expenditure hike likely in Interim Budget 2024 as Centre looks to stay on fiscal glide path
15 income tax, personal finance ideas for FM
What electric two-wheeler makers need from Budget
View: Ahead of Budget, here's what India Inc wants
