Market anxiety unwarranted, economic growth remains steadfast: Alchemy Capital

Alchemy Capital Management believes that the market’s anxiety surrounding the outcome of the General Election is unfounded, given that the current economic growth of the country is steadfast and will continue regardless of which government assumes power.

The returns delivered by the equity market are largely in line with the corporate earnings growth and the election outcome will not change the long term outlook of the market, said Hiren Ved, Director and CIO, Alchemy Capital Management.

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In last 10 years, the Nifty 500 companies earnings have registered a compounded annual growth of 41 per cent in this fiscal to ₹14 lakh crore against ₹3.6 lakh crore in FY20 while the market capitalisation of these companies has jumped 35 per cent to ₹354 lakh crore against ₹107 lakh crore in the same period.

The Nifty earnings in the same period was up 27 per cent to ₹7.8 lakh crore (₹3 lakh crore) and market cap jumped 28 per cent to ₹179 lakh crore (₹66 lakh crore).

For NSE-500 companies excluding Nifty 50 companies the earnings CAGR was up 80 per cent at ₹6.3 lakh crore (₹0.6 lakh crore) while market cap increased 44 per cent to ₹175 lakh crore (₹41 lakh crore).

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However, he said the best performing sectors and companies keep changing depending on the flavour of the economic growth.

Alchemy High Growth, which has completed 22 years of existence, has delivered CAGR of 22 per cent, outperforming the benchmark S&P BSE 500 TRI CAGR of 18 per cent.

An amount of ₹1 crore invested in AHG in 2002 has become ₹80 crore as on May, 2024, despite all the turbulence and COVID-19 impact.

Interestingly, over the past one year, AHG has delivered returns of 59 per cent surpassing the benchmark’s performance of 38 per cent.