Nifty to rally 50% in 3 years? Prashant Jain thinks so and he's buying small and midcaps

Veteran investor Prashant Jain forecasts Nifty returns of 14 to 15 percent CAGR, translating into cumulative gains of 45 to 50 percent over the next three years, citing receding macro headwinds and normalising valuations. He argues that the Nifty's one-year forward PE has corrected about 15 percent from its peak to align with the 10-year average, and that FPI ownership of Indian equities is at a 15-year low, leaving the market well-placed for upside once global liquidity rotates. Jain is turning constructive on small and midcaps, overweighting banks, automobiles, consumer services, insurance and pharma, while remaining tactically underweight on IT services given a roughly 70 percent valuation premium over US peers.