'Indian Market Remains Resilient Amid Global Economic Challenge'

The volatiltiy in the Indian equity market is making investors jittery about returns. But those who stick to their long-term goals will emerge victorious. In an interview with Outlook Money, Neelesh Surana, chief investment officer, Mirae Asset Investment Managers India), advises systematic investments to beat the blues in the medium term, and cater to long-term goals, such as retirement. He also spoke about the sectors he is optimistic about and the ones that need a cautious approach

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The equity market is currently experiencing a turbulent phase. What will be the outlook in the medium to long term?

The Indian equity market has displayed resilience despite adverse global macroeconomic conditions, such as high interest rates and surging crude oil prices.

In the face of these global challenges, the Indian economy and earnings growth are expected to remain reasonably resilient. This is due to increased investment in housing, strong balance sheets, new service and manufacturing export opportunities, mean revision in the rural economy, and the positive impact of a more formalised economy.

We expect interest rates in India to soften over the next year, given likely comfortable inflation, which should support the equity market. Additionally, inflows into equity mutual funds remain steady and reliable. Overall, we maintain a constructive outlook on the market and advise investors to maintain a 3-5-year investment horizon, stagger investments through systematic investment plans (SIPs), and keep long-term return expectations modest at around 12-15 per cent.

In terms of valuations, the mid- and-small-cap spaces appear to be overvalued compared to historical levels. What is your investment strategy?

Some small-cap stocks have shown signs of overvaluation, especially those that have seen significant increases from their March 2023 lows. Our existing portfolios are slightly more tilted towards large-caps and larger mid-caps.