Opportunity Amid Crash: Market Veteran Reckons 'The Great Indian Clearance Sale Is On'

The ongoing slide in Indian equities is akin to "the great Indian clearance sale", and investors should view this as an opportunity to pick up promising stocks, according to market veteran Samit Vartak.

The Indian benchmark index, Nifty 50, has corrected 15% from its all-time highs in September 2024 and has fallen over 5% in the last month alone.

However, according to Vartak, the founding partner and chief investment officer of SageOne Investment Managers LLP, the slump is "cyclical", and can be treated as a "big sale that happens every three years".

In an interview to NDTV Profit, the market watcher added that the last correction began in December 2021 and continued till almost half of calendar year 2022. Three years down the line, the market is seeing a similar correction, Vartak said, adding, "We saw the markets peak in September, and now we are already five to six months into this correction."

Generally, the duration of correction is six to nine months, the market analyst stressed. "The faster it corrects, the shorter is the duration."

Notably, the BSE Sensex has plunged by 14.5% from its 52-week high, and plummeted by 3% in the last week alone. The small-cap and mid-cap stocks are not immune to this correction, with BSE Midcap 150 and Smallcap 250 declining by 22% and 24% from their recent highs, respectively.

The bearish trend in the equity market offers an opportunity for investors with an appetite to hold the stocks for a three to four-year period. Such investors can reap "above-average returns" considering the kind of valuation available in select-good quality companies, Vartak said.

Currently, the market has few buyers and lots of sellers, he said. "I can't say what will happen in next three to four months, but if you're a good stock picker, there is an exciting opportunity and I'll be shocked if you can't make money over a three to four year period."

According to Vartak, the market can begin showing signs of revival as soon as the current phase of correction concludes. "In the last one month, the speed of correction has accelerated," he said.

"We need to remind ourselves that you would never get this kind of sale unless there are too many warnings around you," Vartak said, adding that an investor who is looking for opportunity will find it "good to have many worries around".

"I feel happy if there are too many people warning against it (the market). Weak hands can't withstand warnings, but only strong hands can," he further said.