India News
Vikas Khemani, founder of Carnelian Asset Management sees a positive outlook for the Indian stock market due to strong earnings growth and ongoing structural changes despite the current debate over valuations.
It is said that what India is in 2024 is what China was in 2005. This means China is still 19 years ahead of India now in terms of manufacturing.
"Manufacturing in India today is where China was in 2005, and we see a massive wealth creation opportunity. Financials also remain robust, and our banking system is one of the best globally. There are plenty of opportunities in credit, non-credit, and IT services, as well as disruptive ideas within these sectors" Vikas said.
He argues that India's economic transformation makes historical comparisons less relevant meaning the market is neither cheap nor expensive. He advises maintaining realistic expectations as future returns may not match recent gains, but over a long-term horizon India remains a strong investment opportunity.
Khemani focuses on quality management, solid business models and reasonable valuations when selecting stocks, avoiding overhyped sectors. He sees consumption particularly due to India's young, growing population, and manufacturing as major growth drivers. He remains optimistic about financials, credit, IT services and disruptive ideas within these sectors. Caution is advised against overvalued sectors like infrastructure.
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