Sensex may hit the 2 lakh mark over the next 10 years, said seasoned market expert Raamdeo Agarwal, indicating an annualized growth rate of nearly 15% for the frontline BSE index compared to at current levels. Agrawal, Chairman of Motilal Oswal Financial Services, also expects India to be a $ 5 trillion economy by FY29.
The Indian economy is expected to experience nominal GDP growth of 12-13%, Agrawal said in a note, but expects corporate profit growth to be slightly higher than GDP growth over the next next year. decade.
“A 15 percent CAGR growth in earnings over the next 10 years will bring Sensex to 2.00,000,” Agarwal said.
To put it in perspective, Sensex has seen annualized growth of nearly 11% over the past 10 years while also picking up on major crises such as demonetization, the IL&FS fiasco and the COVID-19 pandemic.
Motilal Oswal’s note also highlighted some favorable variables for the country, including India’s well-established federal structure, a huge domestic market dominated by young people, the growth of digitization, strong dollar inflows and d ‘huge foreign exchange reserves.
In addition, falling interest rates and inflation, falling crude oil prices, reducing the current account deficit with an added benefit of the most stable government in place are also good for the Indian economy. .
Agrawal said COVID-19 is a temporary failure and the vaccination marks the beginning of the end. He expects a K-shaped recovery with big business recovering faster.
Among the sectors to watch, Agrawal advises opting for value migration and opening games. He sees a migration of value in the areas of IT, private banking and private life insurance.
Private life insurance is a booming industry, he said, adding that there will be a value migration from public to private.
“Value migration creates a huge opportunity for industries that see an influx of value,” he said.
After the opening, he expects sectors with delayed demand to increase. It is positive for sectors such as automobiles, durable consumer goods, paints and selective industries.
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