Mumbai: Aditya Birla Sun Life Mutual Fund expects Indian equities to scale fresh highs over the next year, betting that stronger earnings growth, a more stable rupee and a continuing pipeline of new listings will outweigh concerns around elevated valuations.However, the fund house cautioned that gains are likely to be more measured than in previous rallies.Read more: Brokerages raise SBI target price after Q1 earnings beat"Elevated valuations are likely to keep the markets advancing gradually and make stock selection important," said Harish Krishnan, chief investment officer for equities at Aditya Birla Sun Life Mutual Fund. Three factors underpin the asset manager's outlook: healthy nominal GDP growth, lower currency-related headwinds and a revival in capital expenditure.The fund house said the profit pool of the top 1,000 listed companies has expanded 18% YoY over the past 21 months, even as overall market capitalisation has remained largely flat, creating room for further upside.Krishnan said India's 3.04% share of global market capitalisation remains attractive, while an analysis of the Nifty 500 index in gold terms suggests equities have become relatively more compelling than the precious metal.
Indian equities could hit new highs next year: Aditya Birla MF
Aditya Birla Sun Life Mutual Fund is optimistic about Indian equities potentially hitting new peaks shortly. This positive outlook is bolstered by robust earnings growth and a stable rupee which are likely to propel market gains. Taking into account the current elevated valuations, a methodical approach to stock selection is vital.
TL;DRAI
Aditya Birla forecasts Indian equities to hit new highs next year on 18% YoY earnings expansion, rupee stability, and capex revival. For IT managers, India's macroeconomic strength signals sustained sourcing appeal but rising valuations suggest higher talent acquisition costs.
182 words~1 min read
