The renowned value investor and Chairman of Motilal Oswal group asked investors to believe in the power of compounding, and said if equity returns compound at 20 per cent annually, then Sensex could hit 300,000 level in next 10 years.
He was speaking at a PMS AIF World event.
Agrawal, however, said he would like to be more moderate in his predictions, and believes investors can expect India’s equity market to rise 15 per cent annually from current levels in the next 10 years, and that will take the Sensex to 200,000.
“The market can do in the next 10 years what it has done over the past 40 years,” he said.
Domestic equity market has not looked back since March 2020 when domestic indices had dropped some 24 per cent at the beginning of the Covid-19 crisis. Since hitting their multi-year lows that March, Nifty50 and Sensex have more than doubled and the smallcap and midcap indices have more than tripled in value over the past 16 months.
Agrawal said there is an argument for buying stocks in sectors that can benefit from the re-opening of the economy, as the second wave of Covid-19 infections abates. In recent weeks, investors have poured money into sectors like multiplex, airlines, hotels and retail, betting on them to outperform going ahead.
“You have to be greedy all the time in the stock market, and don’t bet against India,” Agrawal said.
