Daily Voice | This fund manager is bullish on low corporate, household leverage, robust banking sector for economic growth

One should invest in companies that are competitively well positioned and stay disciplined on valuations.

August 01, 2022 / 09:35 AM IST
Roshi Jain of HDFC Asset Management Company

Roshi Jain of HDFC Asset Management Company

Several of India's growth drivers are unlikely to be materially impacted in the medium term from a global slowdown, believes Roshi Jain of HDFC Asset Management Company.

She believes the medium-term growth prospects for India remain encouraging aided by policy-led and organic pick-up in private sector capex, opportunities arising from a shift of global supply chains, government thrust on infrastructure spending, rebound in the housing cycle together with sustained increase in personal incomes and consumption.

India's growth opportunity over the medium term is well diversified with growth likely across consumption, manufacturing, infrastructure and services, says the senior fund manager of equities at HDFC Asset Management Company with over 16 years of experience in the field.

What is your take on the Indian economy? What’s your view on the anticipated economic slowdown?

Amid the headwinds faced by the global economy on account of geo-political tensions, supply chain disruption, record inflation, rising yields etc. the Indian economy has been largely resilient.

Medium term growth prospects for India remain encouraging aided by policy-led and organic pick-up in private sector capex, opportunities arising from shift of global supply chains, government thrust on infrastructure spending, rebound in the housing cycle together with sustained increase in personal incomes and consumption.

Low corporate and household leverage and a robust banking sector bode well for economic growth over the medium to long term. Several of India's growth drivers are unlikely to be materially impacted in the medium term from a global slowdown.

What strategy one should adopt for the equity market now?

With respect to equity investing, there are a few things which in my opinion hold true at any point in time. Foremost is having a medium to long term investment perspective. One should invest in companies that are competitively well positioned and stay disciplined on valuations.

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Focusing on fundamentals rather than taking short term tactical calls will always hold investors in good stead. Sound and disciplined asset allocation can help investors tide over intermittent volatility in financial markets while helping with long term wealth creation.

What are the themes or sectors that one should bet on at this moment, with a couple of years of perspective?

India's growth opportunity over the medium term is well diversified with growth likely across consumption, manufacturing, infrastructure and services. Investors should stay diversified via good quality and attractively valued companies that have the ability to traverse business / economic cycles while avoiding companies where performance is due to only short term unsustainable factors.

What are the risk factors that can act as hurdles for the market in northward journey, in rest of financial year 2022-23?

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Global slowdown and inflationary pressures can impact near term growth outlook and profitability of companies. Higher cost of capital driven by higher interest rates and liquidity tightening globally can have an impact on valuation multiples besides impacting profitability of levered companies.

HDFC Focused 30 Fund and HDFC TaxSaver have given better returns than their benchmark Nifty500 in last one year. How do you see the investment strategy behind it?

We adopt a bottom-up approach to stock selection, which focuses on quality companies at reasonable valuations. The idea is to select strong companies with growth drivers in the medium to long term. After a considered evaluation of the industry and business cycle and the positioning of a company within that sector, we endeavour to take a risk-adjusted position in the portfolio.

Track record of corporate governance and investor transparency is closely evaluated. The endeavour is to maintain a disciplined approach of looking for quality companies at reasonable valuations. In terms of valuation, we take a holistic approach to capture longer term earnings and cash flow trajectory.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Sunil Shankar Matkar
first published: Aug 1, 2022 09:35 am
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