Have the markets bottomed out? That’s the question on everyone’s mind. Well, Manish Sonthalia, Director and CIO of Emkay Investment Managers says he is not bearish on the markets at all. The current levels of Nifty around 22,000 is a good level to buy according to him and he sees the Nifty rallying to 25,000 over next 9-12 months and expects 26,000 -27,500 by the end of 2027.
In an exclusive interview with FinancialExpress.com, he lists out the top sectors to watch and alternate investment opportunities for India. According to him, reciprocal tariffs are not a worry and FII selling is no big deal.
Here are excerpts from the interview with Manish Sonthalia-
What is your reading of the state of the stock market at the moment?
The euphoria is gone now and we are back to where the fundamental values of the market should be. I think at 22,000 (Nifty levels), we have a very steady level. Anything below these levels, we would be traversing on the extremes on the downside. If 26,000 was an extreme on the upside, below 22,000 would be an extreme on the downside.
The market should gradually move up. We are not going to see a v-shaped recovery. It’s going to be gradual. And after 22,000, I think by December or March 2026, we should be closer to 25,000.
I think Indian markets have held long term median valuations of around 12-18 times. On that basis, basically, we are 18x. So I’m not bearish at these levels in the market.
If Nifty is trading at, let’s say, 20x PE and earnings growth is 10%, it is trading at 2 PEG. Buy any stock in this market, mid cap, small cap, large cap within that band of 2 PEG. Don’t bet on excessive. Don’t buy stocks which are 3 PEG and above.
ALSO READUday Kotak on Trump tariff, FII selling and state of economy The near, mid and long term targets for markets that you have in mind?
Long-term, India’s target is 15% compounded. So India’s market will have compounded broadly at 13-14% and 1% dividend. So at 22,000, if nothing changes, then corporate India’s EPS growth is not going to be 15%, it’s going to be around 10 to 12%.
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