The next five years will be the “Amrit Kaal” for India’s equity markets, according to veteran investor Madhusudan Kela. In an exclusive interview, Kela discussed the Bharatiya Janta Party’s unexpected victory in the state assembly elections with CNBC-TV18. In two of the four states that held elections, the BJP overthrew the Congress and won three of them.
Indian stocks opened at new heights on Monday in response to the BJP’s election victory, with the Nifty 50 rising above 20,500. Additionally, the Midcap index began trading at a record high.
Kela thinks that the government should concentrate on growth for the next five years and that it has been wise to be continuously optimistic about India.
All analysts agree that the outcome of the state elections will support the expectation that the Narendra Modi-led government will retake power in 2024 and will improve investor mood.
While Kela believes that valuations are the primary source of concern for the market, he suggests looking at the broader picture, which includes the fact that growth and interest rates are now much more stable.
Kela sees valuation comfort in the financial sector and thinks it currently offers a good risk-reward profile.
From a risk-reward perspective, he stated, “I would say the financial space looks very compelling to me because these stocks have not participated in the last 12–18 months meaningfully.” “We have always preferred public sector banks over private sector banks, but the combination of the public sector and some excellently consolidated private sector banks is now the bet.”
The return of institutional flows over the past few sessions has been another factor helping the market. Through the end of last week, foreign investors dominated the cash market as buyers, and on Friday, their share was even greater than that of domestic investors.
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