Nifty May Reach 15,000 As Indian Economy Recovers: Milind Karmarkar
An employee walks past electronic ticker boards that indicate the latest stock figures inside the atrium at the National Stock Exchange (NSE) in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

Nifty May Reach 15,000 As Indian Economy Recovers: Milind Karmarkar

The recent sprint seen in Indian benchmark indices have just been a session of “catch up”, according to Dalal & Broacha Portfolio Managers’ Milind Karmarkar, who thinks the market will likely head higher as the economy recovers.

From the peak of January 2008 to now, the compounded growth rate of the Nifty 50 has been just 6% whereas the economy has grown faster than that in nominal terms, Karmarkar said. Over a long term, markets usually give a 20-30% return over nominal GDP growth—something that hasn’t happened over the last 12 years, the senior fund manager told BloombergQuint’s Menaka Doshi in an interview. Just the catch up with GDP growth suggests the index should be at 14,800 levels, according to his computation.

“If we assume an 8% nominal growth next year, 14-15,000 (for the Nifty 50) won’t be difficult.”

Yet, Karmarkar said, the speed of the recent rally may lead to some profit booking or “cooling off” period. However, he emphasised the long-term potential of a “young and growing” India to urge investors to remain positive on equities.

In his multiple conversations with BloombergQuint over the years, Karmarkar has stressed on his strategy of investing in “marathon runners” and “relay runners” at the same time to make a well-balanced equity portfolio.

“Relay runners would typically be economy stocks, to do with commodities, chemicals, engineering products etc.,” he said, reiterating his investment ideology. “When it comes to marathon runners, I continue to believe that anything to do with consumption will work—whether it is pharma, hospital(s), finance, FMCG or retail.”

While the economy stocks performed better than consumption stocks in the quarter ended September, Karmarkar said it simply shows that the economy is on the mend. “We won’t change our investment strategy because of one quarter.”

Here are Karmarkar’s view on various sectors:

FMCG & Consumption Stocks

  • Continue to like food-oriented stocks because we think it’s a large opportunity. We’ll see some toning down of growth in coming quarters but there’s still a lot of opportunities.
  • See a lot of demand for ready-to-eat food.
  • Cosmetics and all have been impacted and they could do well once people start moving out.
  • Difficult to get higher than GDP growth here because they all have good penetration.
  • Can invest in sectors like liquor, etc. when valuations are good because they will recover once the pandemic is out of the way.
  • Hotels are also a post-Covid play—they’ll do very well despite the fact that international travel will take time to pick up.
  • Staycations will be the way to go for another six months but international travel will pick up then.
  • Cinemas should pick up because people are tired of streaming.
  • Look for companies with zero-to-low debt.

Consumer Durables

  • Durables also have a huge opportunity, especially ACs, because of low penetration.
  • Can play this via brands or contract manufacturers. This is one of the marathoners.
  • Seeing electricity reaching every part of the country and that too with some stability.
  • Tariff changes in the short term are unlikely to deeply impact the investment thesis.


  • Have played autos via auto ancillary and are holding on to it and making money.
  • Have seen this level of dip in the ’90s before, but autos then recovered to deliver some of their highest growth.
  • Don’t think it’s any different this time but the pace of growth may never reach very high rates because of infrastructure issues.
  • They will be market performers, not outperformers.
  • The main growth phase of two-wheelers is over. They will grow but at GDP rate or slightly better.

Real Estate

  • It could be interesting but we haven’t looked at real estate players.
  • Have been playing them through housing financials.


  • We continue to be invested in retail-focused lending companies.
  • Invested in banks, non-bank lenders and housing financiers.


  • Still space in pharmaceuticals with a long term view.
  • The sector has legs of growth to their business—India, U.S. and rest of the world.
  • Governments on all three levels are very aware now of the importance of healthcare spending.

Watch the full conversation here:

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