S Krishnakumar shares insights on market performance, cautioning on high valuations and potential earnings surprises in auto ancillaries. He highlights megatrends in renewables, e-commerce, and manufacturing, stressing the need for strategic investment timing. Krishnakumar further says that "opportunities are very rare to come by where there is a lot more comfort in valuation. This is a market which is well priced in ."
Are Indian equities overvalued, what’s the interest rate outlook, what themes will play out in 2024, which sectors could do well, what risks lie ahead for investors? The founder of Lion Hill Capital and former CIO-Equities of Sundaram MF answers these questions and more
S Krishnakumar says: “I think consumer durables, building material, home improvement have been spaces where in the next couple of years, we will see very substantial growth and we would see the benefits of margin improvements coming through as the demand situation improves. Even in a big bull market, we will have substantial corrections of 8-10% happening every year across the next five years also. But I think the point is to be invested and ride the growth in earnings and compound your wealth by about 15%.”
S Krishnakumar says: “Definitely this year has been quite a bit of surprise aided by expansion in operating margins. Nifty earnings probably would be upwards of Rs 1000 at this point for FY24. So, if you run forward one-year, two-year earnings, we should be around Rs 1,115 on a one-year basis and about Rs 1,280 on a two-year forward basis and discounting the current multiples.”
The fundraise happened through the course of the current financial year with Tamil Nadu Emerging Sector Seed Fund and SNAM Group of Companies as lead investors.