'We see ample opportunities for alpha generation in the country'

How is your team viewing the current market valuations and preparing for possible corrections? Nifty delivered 15.2 per cent returns over FY04-24, driven by 11 per cent earnings growth. India's corporate profit grew at a CAGR of more than 20 per cent over FY20-24 and may grow 15 per cent over FY24-26. While corporate profits grew strongly, Nifty's ROE jumped from 12 per cent in FY20 to 16.3 per cent in FY24 (decadal high). Expectations of superior earnings growth and higher ROE could lead to premium valuations for India. However, disappointing growth could correct valuations. At HSBC Mutual Fund, We are optimistic about Indian equities, supported by a strong medium-term growth outlook, but cautiously so, expecting reasonable growth driven by capital expenditure, positive global factors and domesti

This article was originally published on October 28, 2024.