Markets may be entering opportunity phase; focus on selective bets: Dhiraj Relli
Why it matters: India is still expected to deliver real GDP growth of around 7%, with nominal GDP growth in the range of 10–11%.
- Dhiraj Relli notes that elevated oil prices are creating a cascading impact on inflation, interest rates, and corporate earnings globally, but easing geopolitical tensions in West Asia could offer relief.
- India's macroeconomic outlook remains stable, with the RBI projecting GDP growth around 6.9% and broader expectations for real GDP growth around 7% and nominal GDP growth in the 10–11% range.
- Corporate earnings growth for FY27 is expected to moderate from 14–15% to 10–12% due to high crude oil prices, though double-digit growth is still anticipated with a more broad-based recovery.
- Market valuations have improved over the past 18–20 months, bringing them closer to long-term averages and making the risk-reward equation more favorable, particularly after heavy selling by foreign portfolio investors.
- HDFC Securities is identifying multiple opportunities with attractive upside potential from its coverage universe of over 270 companies, emphasizing stock-specific investing in the current environment.
Dhiraj Relli of HDFC Securities believes markets are entering an opportunity phase, despite global headwinds like elevated oil prices impacting inflation and corporate earnings. He anticipates a shift back to domestic drivers for India, where macroeconomic resilience and improving valuations present a favorable risk-reward scenario for selective, bottom-up investing.
