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No single theme to drive market; volatility to continue: Milind Karmarkar

June 10,2024

“I am not saying that the market will go up five times, but I am seeing the repeat of that. So, we are seeing, as you said, huge volatility, not the kind which we saw earlier, but still a huge volatility,” says Milind Karmarkar, Dalal & Broacha Portfolio Manager.

So, actually, again, as always, I go back in history. So, in fact, 2002 to 2008, that period was one of the best periods to be in the markets because you saw the best, you saw the worst. You saw what happens after a coalition comes in power. You see what happens when a liberal party like Congress is supported by communists, the market goes down 20% and after that the market goes up five times.

You have seen that happen. I think we are seeing a repeat of that. I am not saying that the market will go up five times, but I am seeing the repeat of that. So, we are seeing, as you said, huge volatility, not the kind which we saw earlier, but still a huge volatility.

And now we have a government which is a coalition government all said and done, though BJP has a significant number of seats, but it is a coalition government and there will be coalition politics will come into play.

So, my belief is that whenever a coalition is at the centre, then you see a decent growth. The clear focus is economics. The clear focus is to do better for the masses and that is what drives the markets, that is what drives the economy as well.

My view is that, frankly, now the market is far better discovered than what it was in 2003-04. There are so many analysts, there are so many funds, and everyone is researching companies. So, according to me, market is fairly discovered market.

There may not be a single theme which will drive the market. The only mega trend which I see and I have been talking about it earlier also is consumption and rising per capita income. So, whichever industries benefit out of that will continue to do well.

Within that, of course, there are smaller trends which are also there, like you said, whether it is railways, whether it is power. But again, there is a slight difference here. What will happen probably is that the PE expansion will not happen going forward. You will get the returns which earnings will give you.

I do not see it immediately. Five years down the line, I do not know. But immediately, at least it is unlikely that the PEs will contract, especially in themes like railways, power and these, because there is a defined growth path there for next four-five years.

Source: Economic Times

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