Indian market placed well for long term; expect volatility in near term: Nilesh Shah of Kotak Mahindra AMC
shares his outlook for 2024 and what investors should do in the current scenario. In the last few years, India has done exceptionally well. And it is a function of India doing well and others doing badly.
Now, we are one of the world's most richly valued equity indices. Second, the markets are at near all-time highs while the others are at ten-year, 15-year and 20-year lows. So that shows the stark difference.
If you take a long-term view of India, we still remain bullish because we are seeing a convergence of three things. First is our earnings growth. Our earnings growth is between 12 and 15% every year.
It also goes higher than 20% on a good day. If our earnings continue to grow faster, then higher valuations are justified. The second thing is governance.
Today, there are so many emerging markets where you are unsure about governance. For example, in China, their most prominent entrepreneur, Jack Ma, was stripped of Alibaba's managerial position overnight. In Russia, if you are criticising the government, people disappear.
In many other emerging markets, promoters make money, and their companies don't. Compared to them, Indian governance standards are very strong. The third big thing which is silently happening in India is the green transformation of India.
We are the lowest per capita carbon emitter. One can say that you are just $2600 in a poor country, and hence, your carbon emission is low. But we have become 5th largest economy with the lowest per capita carbon emitter.
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