Bullish on India’s large caps in long term, may expect returns up to 11-12%: BlackRock

We are bullish on India’s large caps in the long term, owing to the recent corrections in the space that have made it suitable for investment, says Vivek Paul, Head of Portfolio Research BlackRock Investment Institute. “One may expect returns of about 11-12% in the 5 year period. In the near-term, we are positive on IT services, consumption-related themes, real estate and select industries benefitting from government incentives to boost onshore manufacturing. At the current time, investors can keep a near-term view and focus on themes and keep a tactical approach due to the global uncertainties with U.S policy under Trump."

While addressing the media, Vivek also said that the demographic quotient, tech transformation combined with resilience in navigating a fragmented geopolitical landscape with the US-China brawl in the backdrop keeps their view on India positive in the long term.

On India’s economic slowdown concerns, the firm says it is cyclical and they remain positive on corporate earnings to remain strong supported by robust growth background, with policy rates likely to be around 5% down from the current 6.5%. Contrary to broad market consensus, firm believes Indian equities are not materially expensive. They think India’s relatively strong growth outlook could help explain a P/E ratio above historical averages.

BlackRock Investment Institute sees capital markets deepening including in emerging markets – to help channel money seeking new opportunities and sources of return and private markets will play a pivotal role, allowing portfolios to gain unique exposure to the transformation as public markets can only fund some of it. It says, “Private markets can offer exposure to early-stage growth companies driving AI adoption and to vital infrastructure projects. We think the future of finance will be shaped by non-bank lenders increasingly funding such large-scale projects. This highlights why private market assets under management are expected to roughly double by 2029 from 2023 levels.”