Market May Make New Highs Within This Year, Says Emkay Global's Nirav Sheth
Sheth forecasts mid-teen earnings growth for financial year 2026 and beyond, further strengthening his bullish stance on the market.
Despite the market correction witnessed since September, Nirav Sheth, CEO - Institutional Equities, Emkay Global Financial Services, remains optimistic about the outlook, asserting that a bounce-back is likely in the coming months.
Sheth believes that this phase was more of a bull market correction than a sign of sustained downturn. He predicts that the markets may make new highs within the year, driven by factors such as stable growth projections and the strengthening of the rupee.
"I am very bullish," he told NDTV Profit, highlighting the favorable conditions for India.
The markets have seen volatility through this year. The Nifty 50 index has fallen 2.15% so far, BSE Sensex is down 1.67%. The Nifty 50 and BSE Sensex have fallen 6.42% and 10.23%, respectively, from their all-time highs.
According to Sheth, over the next three to four months, the markets will start to discount earnings for financial year 2027 and lower interest rates, setting the stage for new highs.
He also emphasised that India has been losing its share of the global savings pool in recent years, but this trend is expected to reverse.
He attributes some of the recent market volatility to tight monetary policy, food inflation, and fiscal policy adjustments due to elections. However, with these factors now changing, Sheth argues that the outlook has improved significantly.
Structural changes in global monetary policies, particularly the US's shift towards tighter fiscal policy and looser monetary conditions, are seen as positive for markets. This shift, along with the expectation of lower US bond yields, should lead to a stronger rupee and more favorable conditions for India’s economy.
Sheth cautions that trying to time the market can be risky. Instead, a bottom-up investment approach should be adopted. He acknowledges that while the market has faced valuation concerns and local corrections, the broader global context has seen dislocations, especially due to the rally in bond yields.
Sheth believes that the next phase of growth will be driven by a combination of lower bond yields, strong liquidity, and better-than-expected earnings. He forecasts mid-teen earnings growth for financial year 2026 and beyond, further strengthening his bullish stance on the market.
