Equity investments should give about 15% annual returns over next 5 years: Raamdeo Agrawal
According to Raamdeo Agrawal of Motilal Oswal, Indian equities may yield a promising fifteen percent annual return over the upcoming five years. However, foreign investors are currently drawn to more dynamic markets like South Korea and the US, deterred by India's capital gains tax and currency instability.
Motilal Oswal Financial Services chairman Raamdeo Agrawal predicts Indian equities could deliver around 15% annual returns over the next five years. He notes that the economy is growing at 7.5-8.5%, with corporate profits expanding at 13-14%, suggesting an index return of 12-14% after portfolio management. Agrawal believes the Nifty will likely rise 15-20%, driven by earnings growth of 15%.
Foreign investors are hesitant to invest due to momentum in the US and a weak Indian currency, which forces them to pay capital gains tax in rupees. Despite this, India has become a funding market for emerging market allocations, particularly due to the AI story. He advises that companies should not go public until they are profitable, as public markets only value earnings, leading to losses during growth phases.
In the bank sector, Agrawal favors ICICI, SBI, and other banks with strong balance sheets and robust credit growth. He is cautious about valuing IT stocks due to AI disruption but sees potential in the sector's long-term growth. Agrawal believes the AI theme might be overvalued, but the market's self-correcting nature prevents a complete bubble.
Written by urgent.news from The Economic Times - Top News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
