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Tezzbuzz Desk- The stock market is currently experiencing ups and downs, but veteran investor and Chairman of Motilal Oswal Financial Services, Ramdev Aggarwal is very positive about the Indian equity market. He believes that the Indian stock market can provide an average annual return of 15 percent in the next five years. If this estimate proves correct, then investors' portfolio may double in about five years. According to Ramdev Aggarwal, India's economy may grow at the rate of 7.5 to 8.5 percent in the next few years, while corporate profits may see a growth of 13 to 14 percent. Economic growth and increase in corporate earnings can create a strong base for the market. However, he believes that after about two years of slowdown, the market may remain in a limited range for some time and after this the next phase of growth may begin.

Talking about the current valuation, Aggarwal said that Nifty is currently trading at a valuation of about 20 times the earnings of the companies. If corporate earnings continue to grow by about 15 percent, the market valuation multiple may come down. According to him, there is a possibility of 15 to 20 percent increase in the stock market from the current levels. Selling by foreign investors i.e. FIIs has been a matter of concern for the Indian market for a long time. However, Agarwal now sees signs of change. He says that foreign investors are currently coming to India in a 'stop selling' phase. According to him, if the continuous selling by foreign investors stops then the huge pressure on the market can be reduced. One of the reasons for FIIs moving to other markets is the better earnings and strong momentum in America and some Asian markets.

Aggarwal also expressed his opinion regarding capital gains tax for foreign investors. He says that taxes are certainly a problem, but the biggest concern for foreign investors is the falling value of the rupee. Foreign investors invest money in India in dollars, while taxes are calculated in rupees. In such a situation, the weakness of the rupee can affect their real dollar returns. He believes that to attract foreign investment, India needs to maintain a competitive environment for investors. Ramdev Aggarwal is very enthusiastic about the banking sector. He says that the balance sheet of Indian banks is in a strong position and credit growth also remains good. He expressed positive opinion about banks like ICICI Bank, SBI, AU Small Finance Bank, Federal Bank and Karur Vysya Bank. He is also optimistic about HDFC Bank and believes that the current valuation is attractive compared to historical levels.

Agarwal's outlook regarding IT sector and AI has also improved compared to before. He believes that AI may definitely put pressure on the business model of IT companies, but the situation is not as bad as it appeared last year. At the same time, he does not fear any major market crash regarding AI investment. According to him, the expenditure on AI infrastructure is creating demand in many other sectors as well. Apart from this, Aggarwal also expressed concern over the closing auction system implemented in the stock market. He says that changes made to solve a problem can sometimes create new challenges. However, he hopes that if this system does not work as expected then market regulator SEBI will review it. Overall, Aggarwal's estimates bode positive for Indian investors, but the potential for 15 per cent annual return or doubling of the portfolio not guaranteedbut rather their assessment of the likely direction of the market.