Vikas Khemani predicts market to gain 15 to 20% this Samvat, says PSU banks and manufacturing companies will lead India’s next big bull run

Indian equities are on the cusp of a strong upward cycle after nearly a year of consolidation, said Vikas Khemani, founder and CEO of Carnelian Asset Management. Khemani expects the Nifty to scale 29,000 to 30,000 units in the current Samvat year, predicting a market return of 15 to 20%, supported by rising liquidity, policy support and a revival in corporate earnings.

“Our confidence in the India story remains strong. The consolidation phase is over and as growth returns, the markets will do very well,” Khemani said in an interview with ET Now.

Liquidity, policy support and revenue to drive the next leg of the market

Khemani noted that last year’s liquidity crisis – caused by the RBI’s rupee defense and tighter lending norms – has turned sharply.

With interest rate cuts, credit growth measures and consumption-oriented policies such as VAT rationalization and income tax cuts, India’s macro structure has become supportive.

“Both domestic liquidity and foreign inflows are expected to improve. With FPIs returning, we should see a stronger and broader market rally,” he said, adding that India’s structural fundamentals are firmly in place despite global uncertainties.

The financial sector, the manufacturing sector and the consumer will take the lead

According to Khemani, the banking and financial services, manufacturing and consumer discretionary sectors will be the main outperformers this year. He expects PSU banks and select NBFCs to continue their strong performance, supported by robust credit demand and capital efficiency. “BFSI remains the most important channel for India’s savings. From PSU banks to insurance and capital market intermediaries, the sector offers a wide range of opportunities,” he added.

Khemani highlighted that ICICI Bank, Aditya Birla Capital and life insurance companies are among the major players in the sector.

Be careful with private placements and unlisted shares

While he was bullish on listed stocks, he raised a note of caution about the current rush of investors into unlisted stocks
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He warned that many retail and family office investors are chasing private placements at high valuations without understanding the risks.

“Investing in the unlisted space requires deep expertise – in pricing, rights protection and governance. Retail investors often only realize risks in retrospect,” he warned.

‘Fad to fundamentals’: New Age tech stocks are back in play

Khemani, who had previously dismissed the 2021 tech IPO frenzy as a “FOMO-driven fad,” now sees a shift in fundamentals.

He believes that new-age platforms like Paytm and PB Fintech have moved from ‘burning’ to ‘earning’, improving the visibility of their cash flow and business models.

“As valuations corrected and business models matured, we started investing. Paytm at ₹550 was a value buy – not at ₹3,000. The key is identifying risk reward, not chasing trends,” he said.

Global risks remain, but India’s structural story remains intact

On potential risks, Khemani acknowledged global uncertainty – from tariff disputes to deglobalization and geopolitical conflicts – but maintained that India’s macro recovery cycle is complete.

“We will live in a multi-polar world of geo-conflict, but India’s structural risks are behind us. There may be short-term volatility, but long-term fundamentals remain robust,” he said.

In short

Khemani remains firmly optimistic about India’s growth trajectory.

With structural reforms, credit expansion and policy tailwinds, the market has entered a phase of sustainable profit-driven growth, he said.

“Investors should stay invested and focus on stock selection. It’s not about timing the market, it’s about owning the right companies through the cycles,” he concludes.