'I am positive about the banking and financial services sector'

We have always been very prudent whenever we launch new funds. Last month, we launched the Banking and Financial Services Fund, which echoes my view of how we see the BFSI space over the next 5-10 years in India.

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How do you analyse the recent performance of the Indian equity market, and what key trends or patterns have you observed? What challenges or risks should investors be mindful of?

If you look at the last four quarters or so in terms of key market trends, we have seen decent moderation in top-line growth. But on the other side, EBITDA margins and EBITDA growth continued to remain strong. The main reason is that companies haven’t really passed on the benefit of lower raw material cost to their customers, and so despite having low volume growth, they are posting higher profitability. That’s one key trend we have seen in the last three or four quarters. Also, the trend of improving balance sheets and return on equity levels for companies post-pandemic has continued.

We are also seeing corporate capital expansion expenditure go up on a year-on-year basis. Overall, if you look at it on a bottom-up basis, we are seeing better profitability in the last three or four quarters along with improvement in balance sheets. In terms of how we analyse the recent performance of the Indian equity markets, I will put it into maybe two or three baskets: one being on the macro level. Indian macros have been resilient. When you look at investors’ numbers, the monthly GST collection, and political influence in terms of announcements or interference, I think it’s all been on the right track. That’s one of the reasons for the good equity performance.