India's Equity Markets Poised for New Highs by March 2027: ASK Private Wealth Analyst Forecasts

India's Markets on the Path to Recovery

Indian markets have experienced a significant correction due to global volatility stemming from Trump-era tariffs, oil disruptions, and persistent geopolitical tensions. However, Rajesh Saluja, Co-Founder and CEO of ASK Private Wealth, believes that the worst is behind and that equities are on the path to recovery.

According to Saluja, India remains under-allocated in global portfolios, and the country's markets are likely to hit an all-time high before FY27. He attributes this optimism to several key factors, including the increasing presence of domestic capital.

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The significant increase in mutual fund inflows, with a record Rs 22,000 crore in March, indicates a strong domestic presence in the market. Additionally, domestic ownership of listed companies has surpassed FII ownership, marking a structural shift in the market. This shift is attributed to the resilience of domestic flows, with record SIP inflows of around Rs 32,000 crore in March, despite falling markets.

Saluja believes that the current phase of volatility is a temporary reset rather than a structural problem. He identifies several sectors, including energy, defence, and telecom, as holding significant long-term potential.

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In the public markets, Saluja is most positive on financials, energy, defence, telecom, and electric vehicles. He also recommends a cautious approach to IPOs, emphasizing the importance of selectivity and focusing on high-quality businesses with reasonable pricing.

In the alternatives and private markets space, Saluja advises investors to track closely the theme of AI infrastructure and strategic sectors, with a greater emphasis on the underlying ecosystem enabling AI growth. However, he cautions against investing in secondary transactions and locked-in alternative products under the garb of pre-IPO funds or secondary funds.

The upcoming SEBI overhaul on PMS is expected to bring about tax parity with mutual funds, standardisation across onboarding, reporting, and benchmarking, and improved transparency and comparability. Saluja believes that the wealth management industry in India remains significantly under-penetrated, with only a fraction of the HNI and ultra-HNI base served by formal wealth managers.

Overall, Saluja's outlook for India's markets and the wealth management industry remains positive, with a focus on long-term growth and structural shifts in the market.