For FY25 and FY26, we are looking at 14-16% CAGR in earnings: S Krishnakumar
S Krishnakumar, Founder & Director,Lion Hill Capital, says “a reversal in the interest rate cycle globally means that money is going to be available at a much lower cost and we are going to see more risk-on come through over the next couple of years. Also, the outcome of the state election results in India has removed uncertainties about political continuity following May 2024 elections. These two major factors have removed some uncertainty from markets and a rally that could have happened in the middle of 2024 has already happened in December ‘23 thereby front-ending a lot of the returns of 2024 in a way.”
Which side of the argument would you lean on, given that on the one hand, how inherently domestic flows, and now increasingly overseas flows are also good, but on the other hand, the recent rally in the month of December has been pretty sharp?
S Krishnakumar: A couple of uncertainties are out of the way. One is, the state elections in north India gave BJP a thumping victory and removed uncertainties about the central elections in May 24 which now seem to be very much in the bag for the BJP-led front.
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The second one was more global in nature where the US Fed indicated a pivot and started talking about moderation of inflation and how interest rates probably will come down by about 50-75 basis points in the next one year and more. So, this reversal in the interest rate cycle globally means that money is going to be available at a much lower cost and we are going to see
