IIFL Wealth Management’s Karan Bhagat on market outlook and more

The year 2017 was a blockbuster year for the Indian markets, with the Sensex recording a 28% jump over the course of last year. However, 2018 hasn’t been much of a blockbuster so far. But IIFL Wealth Management’s MD & CEO Karan Bhagat is of the view that there is still scope for growth as consumption and liquidity remain strong.

“If earnings support the markets, liquidity together with consumption has the legs to carry the market forward,” he said, speaking to Fortune India on the sidelines of the Next 500 annual summit.

However, he warned that valuations are a concern and anything that is 23 or 24 times forward when compared to the indices is likely to face a correction.

“We are broadly positive and constructive on the markets but neutral to negative on midcaps,” he said, adding that he believes there is little scope for increase in multiples for the midcap space.

He then added that the fragile political environment across the globe and rising interest rates could pose risks to the markets.

Speaking about the impact of the upcoming general election on Dalal Street, Bhagat said a coalition government will be looked at as a negative outcome by the markets while stability at the centre will bode well.