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Shankar Sharma explains why he's not too worried about high market valuations

market | Dec 7, 2022 4:25 PM IST

Shankar Sharma explains why he's not too worried about high market valuations

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Market veteran Shankar Sharma is of the opinion that 2023 is going to be better than 2022. He adds that though India is an expensive market, it doesn’t mean it will underperform. Sharma said he is bullish on real estate space and bets on small caps that are regional plays.

The Indian markets have outperformed peers in the past few months when the global economy has struggled with supply hassles and high crude due to the ongoing Russia-Ukraine war and the strict China COVID lockdowns. While the Dow Jones is only up around a percent in the past six months, the Nifty50 has rallied over 13 percent.

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With investors parking money in India, market watchers see valuations as frothy but are divided about the next turn the markets are going to take. Market veteran Shankar Sharma is of the opinion that 2023 is going to see the bulls find new gear. "India is an expensive market but it doesn’t mean it will underperform," he told CNBC-TV18.
"I don’t know by what metric they call it expensive and therefore India needs to underperform. (They) pick data points to suit that point of view irrespective of whether the data makes sense or not. My view is simply that 2023 is going to be even better than 2022,” he added.
Sharma is positive on small caps that are regional plays. He believes that these companies will deliver strong returns going ahead.
“The play is very simple. Go and pick companies that are servicing regional plays, rather than look at pan India. Not to say, you should not but I am just saying the undervalued, undiscovered opportunities in regional plays are just humongous,” he explained.
When it comes to new-age stocks, Sharma believes that the valuations are too high. “These companies misused and abused that opportunity by crazily overpricing their offerings. This, paap if you can call it that, will remain with them for a while to come.”
Sharma is bullish on the real estate space disclosing that he had bought shares in companies like Rama Pipes, Kamdhenum and Sumit Woods.
"I am really playing the theme of regional players and real estate. I like real estate as a play, and therefore downstream real estate companies that supply," he explained.
Watch the video for more.
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