Topping 75,000 amid stellar FY24 performance

The BSE Sensex has touched 75,000 levels, an all-time high in the history of Indian capital markets. FY24 itself had a stellar exit for Indian equities with 29 per cent, 60 per cent, 70 per cent returns in Nifty, Nifty Midcap 100, and Nifty Smallcap 100 indices respectively. India’s GDP should be at $3.6 trillion in FY24, with an underlying growth upwards of 7.6 per cent. India is experiencing a mini-goldilocks moment due to solid macroeconomic conditions, healthy corporate earnings, peaking of interest rates, moderate inflation print, and ongoing policy momentum. During FY20-24, the Nifty profit pool expanded from ~3.5 trillion to ~7.7 trillion, representing a solid compounding of 22 per cent. We expect the Nifty EPS to grow 21 per cent and 16 per cent in FY24 and FY25 respectively.

The current momentum in markets has a lot of credit to be shared with the policies of the government. Today, India’s role in the global economy is rising, and global majors are pitching to have a share of this growth economy. Corporate India’s confidence in investing in growth is evident from the manufacturing and industrial activity pick-up. The balance sheets of Indian banks are the best over the last multiple decades and are geared to fund the growth cycle. This decade presents an opportunity to have manufacturing and consumption engines firing together. India’s capital markets have witnessed vibrant participation from domestic retail savers, with demat accounts surging to 151 million in March 2024, from 36 million in March 2019. Cumulative domestic equity inflows have amounted to $92.7 billion in five years. India now boasts of unique combination of ‘size and growth’, with GDP likely to exceed $4 trillion in FY25-26 and $8 trillion by FY34.