The BSE Sensex has touched 75,000 levels, an all-time high in the history of Indian capital markets. FY24 itself had a stellar exit for Indian equities with 29 per cent, 60 per cent, 70 per cent returns in Nifty, Nifty Midcap 100, and Nifty Smallcap 100 indices respectively. India’s GDP should be at $3.6 trillion in FY24, with an underlying growth upwards of 7.6 per cent.
India is currently experiencing a mini-Goldilocks moment due to solid macroeconomic conditions, healthy corporate earnings, peaking of interest rates, moderate inflation print, and ongoing policy momentum. During FY20-24, the Nifty profit pool expanded from Rs 3.5 trillion to Rs 7.7 trillion, representing a solid compounding of 22 per cent. We expect the Nifty EPS to grow 21 per cent and 16 per cent in FY24 and FY25 respectively.
The current momentum in markets has a lot of credit to be shared with the policies of the government. Today, India’s role in the global economy is rising, and global majors are pitching to have a share of this growth economy. Corporate India’s confidence in investing in growth is evident from the manufacturing and industrial activity pick-up. The balance sheets of Indian banks are the best over the last multiple decades and are geared well to fund the growth cycle over the next few years. This decade presents an opportunity to have both manufacturing and consumption engines firing together, leading to more stable and sustainable growth.
India’s capital markets have witnessed vibrant participation from domestic retail savers, with Demat accounts surging to 151 million in Mar’24 from 36 million in March 2019. Cumulative domestic equity inflows have amounted to $92.7 billion over the past five years. India Inc has raised $92.9 billion through primary markets over the past five years. India now boasts a unique combination of ‘size and growth’. India’s GDP is likely to exceed $4 trillion in FY25/26 and $8 trillion by FY34.
Expectations of political continuity after the forthcoming Lok Sabha Elections 2024 should bolster the overall economic momentum further, with a focus on infrastructure, capex and manufacturing occupying the center-stage.
The prospects for India’s capital markets remain bright, with a focus on infrastructure, innovation, and sustainable growth paving the way for an era of unparalleled opportunities. As we navigate the dynamic landscape of the Indian economy, the stage is set for the country not just to seize the moment but to define its destiny as a beacon of growth in the global arena. The big, bold, and blazing India is poised to embrace the ‘Amrit Kaal’ going forward.
(The writer is Group MD & CEO, Motilal Oswal Financial Services Ltd)
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper
First Published: Apr 10 2024 | 11:18 PM IST