Jefferies’ Global Head of Equity Strategy Chris Wood last week said the 100,000 mark seemed reasonable for the 30-stock index in 5 years and that he would be disappointed if it did not happen during this time.
The 30-pack index is currently hovering within kissing distance of 63,000. The inedx will need to surge over 60% to hit the coveted 1,00,000 figure.
Mark Mobius, Founder of Mobius Capital Partners LLP, is also bullish on India story. He said that if the country grows at 7%, one can expect that the reasonably good companies will likely grow at 14%, which is double the growth rate of the country.
“It is very possible that you can get this incredible growth in the size of the market and the actual investments in the market, no question,” Mobius said.
He added that it was amazing there were a number of Indian companies which have a return on capital or return on assets of over 20%. “And if you have a company that has a ROE or ROA of 20% or more… they usually have no debt or very little debt. And usually they are growing at a pretty good pace,” Mobius said further, adding that it is very difficult to find such companies if one looks at other countries.
Meanwhile, stock market expert Shankar Sharma remains “absolutely certain” that Sensex will reach one lakh. “Whether it happens in four years or six years, frankly, is really a meaningless debate,” he added.Sharma, who is Founder of GQuant, said that the Indian markets can grow between 10-14% considering the nominal GDP growth rate. A simple compounding of the Nominal GDP growth rate will take the Sensex towards the 1 lakh mark, he opined.
Reiterating Shrama’s view, analyst Sandip Sabharwal said that a 100,000 mark over the next 5 years was a strong possibility even if one took a conservative 7% GDP growth rate with a 4% average inflation. An 11-12% rate on a compounding basis will take Sensex above 1,00,000, Sabharwal said.
Nilesh Shah, Managing Director at Kotak Mahindra Asset Management Company too believes that it is not “unimaginable” for Sensex to hit 100,000 but one must refrain from attempting to predict the markets. “More often than not you will be wrong,” he cautioned.
To investors, the advice is not to look at Sensex hitting one lakh as the story is much more and beyond this journey, the Kotak AMC MD said.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)