Indian Equity Markets Enter 'Attractive' Zone With Positive Long-Term Outlook: Report

Indian equity markets have transitioned from the ‘fair’ and ‘moderately expensive’ zones, where they largely remained throughout 2024, into the ‘attractive zone’, according to a new report released on Tuesday. This shift is seen as a significant development, signaling a promising opportunity for long-term investors, as per an IANS report citing the Union Mutual Fund report.

Despite ongoing global geopolitical tensions and trade uncertainties, the report highlights that India’s long-term investment outlook remains strong and positive.

Harshad Patwardhan, Chief Investment Officer at Union AMC, highlighted several encouraging factors driving the positive outlook. These include robust macroeconomic fundamentals, strong corporate and banking balance sheets, an anticipated demand revival supported by tax relief and welfare schemes, and emerging signs of a new cycle of private investments, according to the news agency report.

“Healthy corporate and banking sector balance sheets, prospects of a demand revival fuelled by tax relief and expanded welfare schemes, and the potential onset of a new private capex cycle are key positives driving for our outlook,” Patwardhan stated.

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Investing For Wealth Creation

Madhu Nair, CEO of Union AMC, stressed the importance of long-term investing for wealth creation. "It’s human nature to overestimate short-term impact and underestimate long-term potential. We believe the next 10 to 15 years hold great promise for the Indian economy and markets," he remarked. 

He encouraged investors to remain focused on their financial goals and continue investing through Systematic Investment Plans (SIPs).

Union Mutual Fund is also optimistic about a potential surge in investments under the new tax regime, which came into effect on April 1. According to the Union Budget 2025, individuals earning up to Rs 12 lakh annually will now be exempt from income tax. "This will increase disposable income, giving households a chance to invest more in long-term instruments like SIPs," the report stated.

With a positive market outlook and supportive tax reforms, the report projects that monthly SIP inflows in the mutual fund industry could reach Rs 40,000 crore within the next 18 to 24 months. This growth is expected to be driven by rising income levels and greater awareness of the benefits of financial planning.

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