Blitz Bureau
NEW DELHI: India’s economy is in a structurally resilient expansionary phase, and markets could deliver returns above long‑term averages as valuations are favourable, a report said on April 13. The report from investment management firm OmniScience Capital said the economy is in a goldilocks phase with high real gross value added (GVA) growth of 7–8 per cent with inflation anchored within the Reserve Bank of India’s target band.
The recent market correction of around 13 per cent from the September 2024 peak is moderate and does not indicate a bear market, with the Nifty 50 trading at roughly 3x price‑to‑book and about 20x price‑to‑earnings. These levels are at or slightly below long‑term medians that imply forward expected returns driven by earnings delivery with support from multiple expansion.
The report said that recoveries from major drawdowns have historically taken around 24 months on average, reinforcing a typical three‑to‑five year holding period of equity markets.
The banking sector is in its strongest position in recent history, the report said adding that Gross NPAs has plummeted to 2–2.5 per cent, while a Capital Adequacy Ratio (CRAR) of around 17.2 per cent provides an estimated Rs 94 lakh crore in incremental lending potential without requiring fresh capital.
Growth and credit conditions remain supportive, with financial system strength enabling a strong expansion in the economy. “With companies operating at high capital efficiency with clean corporate balance sheets, India is in a sweet spot, domestically, with economic factors aligning for a potential multi-year economic boom,” said Vikas Gupta, OmniScience CEO & Chief Investment Strategist. .
