Emkay Wealth Management, the advisory arm of Emkay Global Financial Services, on Wednesday said it expects the Nifty EPS growth for FY25 to slow down to 7.9 per cent. In a Media Round Table, team Emaky Wealth said “current market valuations are in expensive territory” and the market may witness some consolidation or a time correction.
Dr Joseph Thomas, Head of Research, Emkay Wealth Management, said the domestic economy is poised to grow at 7 per cent as the economy is structurally tuned to grow at that rate. The large public capex, favourable liquidity conditions and the likelihood of lower interest rates augur well for economic growth.
Markets are likely to pick up once earnings growth shows up. According to Emkay Wealth, there are ample stock-specific opportunities in the current market.
Ashish Ranawade, Head of Products, Emkay Wealth Management, said the current market offers opportunities for stock selection as pockets of attractive valuation exist. We may not see a broad-based rally across the board, but there are ample opportunities for growth and wealth creation within Indian equities.
‘Diversify to US stocks’
According to Emkay Wealth Management, which currently manages assets worth ₹20,000 crore, “investors should look at the US market for portfolio diversification”. “An ideal balanced/moderate investor should look at a portfolio allocation of 50:50 equity and debt and within the equity allocation have 30 per cent equity in US stocks (15 per cent overall). The US markets provide good technology exposure that is not available in India,” they added.
The current market, however, provides ample opportunities for stock pickers. “So, the PMS and AIF and active fund managers should do well. Active fund managers are likely to post a higher alpha for its investors,” Emkay Wealth opined.
Besides, Emkay Wealth expects some moderation in IPO market as investors become more discerning. “Companies with unique business models will attract investors’ attention and interest. Spate of IPOs has made India a much wider market than what the indices indicate,” it said.