Will see market rally till May 2024 and beyond, says Enam Holdings

Sridhar Sivaram, Investment Director at Enam Holdings, has expressed optimism about the Indian stock market's performance, foreseeing a rally continuing until May 2024 and beyond.

According to Sivaram, the market favours continuity in governance, citing the positive impact of the government's reforms. He believes this stability will propel the market to overcome any challenges, asserting that the only major concern is the inflation and rates scenario in the United States.

“The market likes continuity in governance because of the reforms that this government has conducted. That helps a lot in terms of how the markets will move from here to May and beyond. So, I think the party will continue from hereon. I think the market will climb all walls of worries. The only big worry is the US inflation and the rates otherwise domestically we are broadly set for a big rally from hereon,” he said during an interaction with CNBC-TV18.

Sivaram drew parallels between the current market situation and the period of 2013-2014. He predicted that despite global uncertainties, the Indian market would persistently climb "all walls of worries".

He attributed this resilience to the expected shift of Foreign Institutional Investors (FIIs) from other emerging markets to India, given their underinvestment in the country.

“I think it will be exactly like 2013-2014. There were a lot of other global worries but the market continued to climb all the walls of worry. We will see the same this time again because FIIs are so underinvested in India that we will see a shift from other emerging markets to India and we will see this market rally through up to May and beyond,” he said.

Sivaram praised Indian women as the best fund managers, challenging others to match their returns. He compared the 20-year returns of both Sensex and gold, emphasising the consistent performance of Indian women in managing investments.

“Beat her returns and show me. 20-year returns – Sensex and gold, both at 14.3-14.4%, they are the same. One year returns – also the same. We do so much work for this 14% returns, watch CNBC-TV18, look at the balance sheet, analyse, and the Indian lady just buys gold,” he said.

Discussing the Nifty index, Sivaram suggested that the market could maintain a compound annual growth rate (CAGR) of 14-15% over the next five years. This projection, if realised, could result in a Nifty value ranging from 40,000 to 42,000 in four years and a potential surge to 50,000-55,000 by the end of the decade.

Sivaram also shed light on the remarkable performance of public sector undertakings (PSUs), boasting a 50% CAGR over the last three years. Despite some PSUs witnessing a fourfold increase in value, he contended that certain banks' low Price-to-Earnings (P/E) ratios could still justify further appreciation, maintaining Enam Holdings' bullish stance on this sector.

The private banking space emerged as a key focus of Enam Holdings' bullish sentiment. Sivaram expressed confidence in the sector's potential profitability, citing its strong positioning and the expectation that credit costs would remain stable. He attributed the recent underperformance of private banks to justifiable reasons and indicated a positive trajectory for the sector.