Sensex will touch 250,000 in 10 years: Saurabh Mukherjea of Marcellus 

Saurabh Mukherjea, Founder and Chief Investment Officer, Marcellus Investment Managers, sees a robust growth trajectory for the domestic stock market over the next decade, with the Sensex potentially reaching the 250,000-mark, indicating a rise of over 235% from the current levels of nearly 73,896. In an exclusive interaction with Business Today, the PMS fund manager projected a nominal GDP growth rate of 10-11% over the next decade, providing a strong foundation for corporate earnings to grow at 13-14% annually.

While short-term fluctuations are expected, Mukherjea emphasises the importance of focusing on long-term compounding effects rather than relying on P/E rerating. He added that foreign investors will remain keen on Indian markets. The money manager, who manages the funds of 8,000 families and handles assets worth Rs 8,000 crore, believes that political stability and favourable economic conditions could attract significant foreign capital inflows, further bolstering market performance. Data available with Ace Equity showed that foreign institutional investors have poured Rs 5.02 lakh crore into the domestic equity markets in the past 10 years.

He added that so far there has been no negative surprise in the ongoing result season (Q4FY24); it is in line with expectations. Going ahead, he thinks that export-oriented companies, especially in manufacturing and specialty chemicals, are poised to deliver strong results. Additionally, sectors catering to middle-class consumption, such as apparel and footwear, are expected to witness decent growth.

While private sector capex has been subdued, recent data suggests a promising uptick. Mukherjea anticipates that sustained private-sector investment will drive economic growth and bolster corporate earnings.

The value of new private sector project announcements for the three months ending March 2024 stood at Rs 10 lakh crore, according to CMIE Economic Outlook. The figure stood at Rs 4.8 lakh crore in Q3FY24, Rs 2.49 lakh crore in Q2FY24, and Rs 6.14 lakh crore in Q1FY24.

While sharing his view on the fall in the AUM of Marcellus, Mukherjea added that the assets they managed were around Rs 12,000 crore in the early months of 2022. With the underperformance, the PMS firm witnessed redemption of around Rs 4,000 crore in the last two years. He also said things are looking on track now. “Our PMS product Consistent Compounders gave 20% returns in the last 12 months; Meritor Q PMS gave 40% returns in the last 12 months and our Global Compounders Portfolio delivered 31.9% over the same period. Our main disappointment of FY24 was our small-cap portfolio Little Champs which gave 0.29% return. That too has turned the corner and delivered 11% return last month,” he said.