Nifty May Pause Before Scaling New Highs, Says Manishi Raychaudhuri

While CLSA believes the Nifty could touch new highs in the near term, Manishi Raychaudhuri, the chief executive officer or CEO of Emmer Capital Partners, strikes a more measured tone. Speaking to NDTV Profit, Raychaudhuri said that although India's long-term outlook remains strong, the index may not outperform in the immediate future due to elevated valuations and muted earnings estimates.

"In the near term, India will likely move in line with broader Asian markets, especially North Asia. Significant outperformance is unlikely," he noted, citing a 55% valuation premium over Asia and Japan, which is well above averages.

Still, flows into emerging markets are strengthening amid heightened risk perception in the US. "Things are beginning to look better both fundamentally and from a flows perspective," he said, pointing to incremental progress on global trade fronts, such as discussions between the US and China, and a trade agreement between India and the UK, as factors supporting a gradual improvement in sentiment.

He also underlined the RBI's tilt towards rate cuts, in line with many Asian central banks that are prioritising domestic growth. However, he flagged the downward revision in India's earnings estimates this season as a key concern.

Raychaudhuri sees promise in three key sectors: defence, green energy, and contract development and manufacturing.

CDMO, generic manufacturing, and green energy are poised to benefit from global supply chain diversification, with India well-positioned to play a larger role. "These sectors will not only drive the Indian market, but also several Asian economies that have developed expertise in these areas," he said.