‘Poor monsoon a risk, but unlikely to trigger runaway food inflation’

A slow-growth environment is the main trigger for the underperformance of Indian markets and foreign outflows, said R. Sivakumar, chief investment officer at Axis Asset Management Co. Ltd (Axis AMC), adding that a rainfall deficit is a legitimate risk but is unlikely to trigger runaway food inflation.

- Dipti Sharma

The primary threat of a poor monsoon is a decline in agricultural output, which impacts the macroeconomy by reducing rural incomes and dampening consumer spending power rather than generating a systemic inflationary spiral, he explained in an interview with Mint. Edited excerpts:

How has the leadership transition been, and should we expect any changes to Axis Mutual Fund’s investment philosophy or decision-making process?

The transition will see the investment philosophy remain substantially the same. Having been with Axis since 2009 and deeply involved in the investment process, the core focus continues to be on high-quality growth companies. This means targeting businesses that grow their earnings and cash flows faster than the broader economy’s nominal gross domestic product (GDP), while maintaining strong management, shareholder friendliness and efficient capital use.

However, there will be a slight adjustment in the day-to-day process. While historically the focus was heavily on growth and quality, there will now be a sharper emphasis on valuation to ensure the fund is paying the right price for that growth.

Now that major events like the US-Iran peace deal are over, what factors will move the market?