“We believe that foreign flows into Indian equities could slow down. It is not because the world is not convinced about India’s growth, but because given the rates at which treasuries are quoting in the developed markets,” says Harini Dedhia, Portfolio Manager and Head of Research, Tamohara Investments.
In an interview with ETMarkets, Dedhia said: “The risk-to-reward ratio is not favorable in looking at equities in general as an asset class; forget Indian equities,” Edited excerpts:
We are seeing some turnaround in Indian markets – is it the Diwali dhamaka or Santa rally?
Neither really. The last 1-year performance of the Nifty50 has been less than that of a fixed deposit scheme, so to term it a rally would be incorrect.
What are your expectations from Samvat 2080?
In Samvat 2080, I expect companies to broadly hold on to their normalized margins; a return to which we are only starting to see in Q2 of FY24.
Last year supply chain disruptions depressed margins. So, a return to margin normalcy with sales growth broadly for BSE500 tracking in line with nominal GDP of India at 11-12%.
Valuations have little room to go up from here on, so logically market performance at best should toe the line with this fundamental growth expectation.
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Top risks that investors should watch out for in the next 12 months?
We believe that foreign flows into Indian