If you take a nine month view, the fair value of the market could be lower than these levels. But the market is never at fair value. It’s either overvalued or undervalued. Six-to-nine months down the line we would look at earnings growth and it should look better. Till now we haven’t seen a double-digit kind of earnings growth in the last 2-3 years. We should end with a double digit growth for March 2018. This coupled with good domestic liquidity over the next one year, will lead the market to new highs. For a long-term investor, with PE multiples of 24 on Nifty, there is decent money to be made as we see a mean reversion in earnings, and when things turn around, earnings can overshoot.
On a three-year view, we are more positive on growth outlook. You could still make low teen returns from the market from a three year perspective. Market gives 6% over inflation, so anything over 10% is a good return for the risk premium and the market can give that return. Markets should scale newer tops from here.