Market is always fairly valued; low-double digit market return can be expected in 2025: Prashant Khemka
Prashant Khemka, Founder, White Oak Capital Management, says he believes that the market cannot be predicted, and it should always be viewed at fair value. It is always at fair value. If it drops 20% tomorrow, that is still fair value based on all the corporate news. Similarly, if it rises, it remains fair value. During COVID, when the market fell by 30%, it was fair value at that time, and when it bounced back by 30%, 40%, 50%, or more, it was still fair value because the market is always changing. In the context of India, a fairly valued market suggests it will provide low-double digit returns over the next year.
One sector which has done exceptionally well this year and has surprised a lot is IT. There is a lot of talk about AI. This is a sector where growth has plateaued. This is a sector where disruption is real. Yet the IT index is not far away from its all-time high. There is no growth, but yet the sector has done well. Why is that?
Prashant Khemka: There is a bit of a misperception on both growth and disruption. First of all, the IT or tech sector is prone to disruption. There will always be some things new, a lot of things that are coming up and anytime there is something new, people would think this would disrupt everything. At the turn of the century, Y2K was supposed to be the death knell for the Indian IT industry. Then, the Global Financial Crisis was supposed to cripple them. Then, there was this whole cloud migration. SMAC at that time, now AI – the acronyms keep changing.
So, first there was
