Indian market likely to double in 5 years, says Manish Jain of Ambit Asset Management
Manish Jain, Fund Manager, Coffee Can PMS, Ambit Asset Management, believes that the Indian market can double in the next 5 years. With the economy seemingly growing in the high single digits to low double digits steadily, the Nifty EPS should grow at a steady double-digit pace sustainably, he said in an interview with LiveMint. He also favours equity over debt, saying it is the best vehicle to create long-term wealth.
Don't get swayed by near-term momentum and always aim for long-term wealth creation by investing in quality businesses, Jain advised investors. Edited Excerpts: Post the recent softness, Nifty trades at a discount to long-term average valuation when earnings growth remains strong and steady. So yes, valuations do look attractive for a long-term quality-oriented investor, the only caveat being that short-term volatility may persist and we would recommend using the same to build long-term positions.
There are pockets of value that exist across multiple sectors; investors need a strong bottom-up analysis approach. We continue to maintain weight on banks and have increased positions in auto & IT. Recently, we have become very constructive (albeit selectively) on chemicals.
However, there is a negligible cash position. FII selling is dependent on multiple factors including the US economy and yields. So while India remains a very attractive long-term opportunity, near-term volatility in markets may persist due to choppy flows.
The Indian economy remains on a strong footing and has demonstrated in the past that we are largely unaffected, so from a long-term perspective, we are not worried. However, in the absolute near term, some key sectors like building materials, etc. may be impacted.
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