India is in a different growth cycle, where aggregate earnings continue to grow faster than expected. The September quarter saw India Inc’s earnings grow by 32% versus expectations of about 25-26%, he said.
Agrawal therefore remains bullish and sees potential for the market capitalisation to match India’s GDP by 2030.
In a recent industry summit, Agrawal predicted the benchmark Nifty50 index to double over the next five years and even swell by 4 times in 10 years.
Despite a rollercoaster journey, Nifty50 has given about 6% returns to investors so far in 2023.
If earnings grow in double digits annually on a sustainable basis, the market is also ought to grow at a similar pace, according to Agrawal.
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“If earnings are going to grow at 15-20%, there’s no reason why markets will not grow at the same rate,” Agrawal, who is the Chairman of Motilal Oswal Financial Services, said during a media meet here on Tuesday.
While themes such as China+1, Make in India, urbanisation, healthcare infrastructure have gained a lot of traction since the pandemic, the one theme that Agrawal is extremely bullish on is digital transformation.
Agrawal expects digitally-powered businesses to grow exponentially in the current decade.
With the rising participation of retail investors and growing SIP book of mutual funds, the equity market veteran sees potential for the total dematerialised accounts to reach 200 million in the near future.