Srinivas Rao Ravuri, Chief Investment Officer at Bajaj Life, expressed optimism for the Indian stock market, predicting healthy double-digit returns over the medium term. In an interview with Mint, Ravuri noted that the Nifty 50's recent performance reflects a consolidation phase rather than a structural shift in market trajectory.
Key Details
Ravuri highlighted that earnings growth for the Nifty 50 has moderated to single digits during FY25 and FY26. He attributed this to heightened geopolitical uncertainties and a global focus on AI-driven markets, which have impacted investor sentiment and capital flows toward India. However, he believes the outlook is becoming increasingly constructive.
Consensus estimates suggest that Nifty 50 earnings could grow at approximately 15% CAGR over the next two years. This growth is expected to be supported by improving domestic demand, moderate inflation, lower interest rates, and continued policy support. Ravuri pointed out that geopolitical risks have eased somewhat, allowing investor attention to expand beyond a narrow set of themes.
Background
Historically, Indian equities have experienced similar periods of subdued returns, followed by strong wealth creation phases. Ravuri stated that such consolidations help reset valuations and create a healthier foundation for future market performance. He emphasized that India's long-term growth drivers, including favorable demographics and sustained reforms, remain intact.
The forecast for double-digit returns in the Nifty 50 suggests potential upward pressure on Indian equities, particularly in sectors sensitive to corporate earnings growth. Investors may respond positively to improving economic fundamentals and lower interest rates.
Watch for upcoming earnings reports and economic data releases that could further influence market sentiment and validate these growth projections.