'Any earnings disappointment could trigger short-term corrections'

ICICI Prudential AMC, which is awaiting regulatory clearance for a ®10,000-crore (IPO), is betting big on the capex and consumption stories that are moving in tandem. Anand Shah, CIO - PMS and AIF investments at the AMC that managed €63,870 crore as on March 31, 2025, tells Nesil Staney that Indian markets are still trading at a 9% premium to global indices.

- @ ANAND SHAH, CIO - PMS & AIF INVESTMENTS, ICICI PRUDENTIAL AMC

Excerpts:

What is the emerging leaders concept?

Emerging leaders are about identifying companies on the cusp of structural transformation. We look for scalable business models, clean governance, prudent capital allocation, and evidence of pricing power. The goal is to find businesses that may be a mid-cap today, but have the ability to become tomorrow’s large-caps. Early indicators include improving return ratios, consistent market share gains, and a track record of reinvesting cash flows constructively. We avoid momentum stories or valuation-driven bets as the emphasis is on durability of growth. The ability to grow without eroding return on capital is what separates the genuine future blue chips from trend favourites.

Which sectors, in your view, still have meaningful earnings tailwinds that the market might be underestimating?