Very often, the investors are not sure of how much return to expect from stock markets. However, Rakesh Jhunjhunwala, referred to as the ‘big bull of Dalal Street,’ is clear– investors should look to make 15% returns from equities in India. Speaking at an event organised by MCX on Saturday, Rakesh Jhunjhunwala said, “ I would expect 18% returns from the stock market. I’m quite sure that 15% is something that most investors should get over a period of time.” Last month, in an interview to CNBC TV18, Rakesh Jhunjhunwala had said, “In a growing economy like India with reasonably good corporate governance practices. I think India will grow at a nominal GDP of 12%. I see no way in which Indian equities will give anything below 15%.”
While some market experts have voiced concern over FII outflows, Rakesh Jhunjhunwala remains unfazed. “I’ve been screaming from 2004, that foreign money is not important. This money which has not started coming in, is just a small cloudburst, it’s going to be tsunami.” Inflows into the Indian capital markets has reached unprecedented levels, propelled by the continually rising mutual fund inflows. The assets under management of Mutual funds stood at a staggering Rs 21. 41 lakh crore as at the end of October-17. According to data from the Association of Mutual funds of India (AMFI), equity-oriented mutual funds (including arbitrage funds), balanced funds and equity linked savings scheme (ELSS) funds saw inflows of Rs 21,900 crore in October.
While a few reputed market voices have cautioned investors that a correction might be in the offing, as there’s a disconnect between earnings and market rally, and that investors should now look beyond equities to bonds and other asset classes, Rakesh Jhunjhunwala remains bullish about equities. “I’m damn bullish, and you don’t have to choose between asset classes,” he told in the same address.
Last month during Diwali, Rakesh Jhunjhunwala said that pharma industry is slated for a rebound. “Everything that could go wrong for the pharma sector, has gone wrong. The US market got very competitive. Rupee depreciated, and the pharma companies had very bad sales domestically due to GST. I would say the worst in behind us. The rebound will depend a lot on the individual companies,” Rakesh Jhunjhunwala told CNBC TV18.
Which companies must the investors watch out for? “I think companies which have very large business in India are going to do well, regardless of what happens in America. In America, those who can move to complex, who have got a good pipeline, whose research costs are not very high, they will do very well,” the investing icon pointed out.