Expect next one year to be quite positive for Indian markets: Varun Goel, Karvy Private Wealth

In a chat with ET Now, Varun Goel, Head of PMS, Karvy Private Wealth, shares his outlook for the markets. Excerpts:

ET Now: You have a lot of brokerages and big market voices saying that 9000 on the Nifty will materialise in the next six months or so. Should we be worried when it comes to valuations? How realistic do you think that number is?

Varun Goel: We continue to be extremely positive on the markets. In June this year, we had come out with a one lakh Sensex target by 2020. At that point of time we were one of the few voices taking such a bullish view. It is very heartening to know that a lot of people are now moving towards that kind of a scenario by 2019-2020.

As far as short to medium term is concerned, we believe that the market is all set to deliver a 15-20% return in the next one year. The earnings growth has been pretty healthy. As GDP growth revives, we are going to see earnings growth accelerate. Our own sense is that for FY16, we are going to see corporate earnings growth of around 20%. It will be a function of strong revenue growth, accompanied by margin in gain for most of companies on the manufacturing and on the infrastructure side.

All in all, the global outlook also looks positive. Domestic cues are all turning positive too. The next one year should be quite positive for the Indian equity markets.

ET Now: What are the sectors that you think look very promising going forward? Would it be the auto ancillary basket? The agrochemical sector too is emerging strong. Is there anything else that you would like to add to this list?

Varun Goel: We are expecting 50 to 100 bps of rate cut around next year. So clearly, public sector banks are a focus area for us. Selectively, we have seen good results coming in. The asset quality is beginning to improve too. The valuations are still quite muted compared to the private sector banks. So, that is one space that I expect to significantly outperform in the next 12 months.