"Growth stocks would see good times ahead"

We speak with DSP Mutual Fund's Atul Bhole who is a seasoned fund manager with a decade of experience in the mutual fund industry. He shares his broad views on the market ahead, and also delves into the factors that have contributed to the underperformance of the DSP Equity & Bond Fund that he oversees. Indian equities have been volatile for quite some time. With the fear of recession looming in some developed economies and the ongoing global banking crisis, where do you think markets are headed in 2023, and how do you see domestic markets performing? Given the global issues, it's very difficult to predict what will happen in the near term. So, it will probably remain volatile only. But if you look at it from the medium-term or long-term perspective, our economy's doing very well in terms of the market performance, the currency, the Forex performance, as well as the interest rate performance. We have done much better than any other country, probably in the world. Over the last two years, if you look at the market, we were flat, while even NASDAQ and DOW were down 35 per cent and 20 per cent, respectively. While our currency depreciated 8 per cent, other currencies like Yen and Euro depreciated by 20-30 per cent. While the US had to increase the rates (interest) by almost 400 basis points on a base of nearly zero, we had to increase the rates by just 250 basis points on a base of 600 basis points. All these parameters tell us that our economy is resilient. That said, we are facing a valuation challenge since we are still looking expensive compared to markets across the world. However, after the last one year of consolidation and some correction, we are now coming into a fair valuation zone if you look at earnings of FY 25. So, in the medium-term perspective, we can look at high single-digit or low double-digit returns. But obviously, the near term will remain chall

This article was originally published on April 13, 2023.