MARKET: A SLAVE OF EARNINGS

Saurabh Nanavati, Managing Director and CEO of Invesco Mutual Fund, joined journalist Vivek Law on the Simple Hai! show about India’s evolving investment landscape and the crucial need for financial literacy.

- 

In this episode Vivek Law and Saurabh Nanavati discuss how geopolitical shifts are shaping the future of wealth creation in India. Nanavati, known for keeping a low profile, but opened up to Law on various aspects of India’s financial landscape.

Market Dynamics: Earnings & Global Positioning

Drawing on his extensive career with global players, Nanavati reiterated his core market philosophy, “The stock market is a slave of earnings”. He explained that, fundamentally, the market is a discounted cash flow of future earnings.

While global events impact India, the market will rally once corporate earnings turnaround, he told Law. This principle explains the current flat market, which Nanavati attributed to weak earnings resulting from an incorrect base that the high growth years of 2022-2023 were actually an overflow from 2020-2021, which was affected by the pandemic.

He affirmed India’s strategic importance by classifying it as one of only five large global markets, alongside the United States, China, Germany, and Japan. India’s underlying index includes 22 sectors, providing fund managers ample opportunity to generate alpha, unlike commodity dependent markets.

Global Interest & Growth Outlook