The Best Investment Opportunity Remains in India

Falling markets have dampened sentiment for retail investors, as seen in the declining investments across equity mutual fund (MF) schemes. VENUGOPAL MANGHAT, chief investment officer for equity at HSBC MF, tells Puneet Wadhwa in an email interview that the company has increased cash positions across most of their schemes over the past few months. This cash may be used to restructure portfolios or take advantage of opportunities as they arise. Excerpts:

- VENUGOPAL MANGHAT, chief investment officer for equity at HSBC MF

After a price-wise correction, do you expect Indian stock markets to undergo a time-wise correction as well?

The Indian market has corrected significantly in the past few months, and valuation excesses are now lower. The Nifty is currently trading below its long-term average valuation at 18x, with mid-teens earnings growth expected in 2025-26 (FY26). At the same time, the economy has slowed, compounded by liquidity tightness and global concerns, resulting in lower earnings growth this financial year. While many factors behind the slowdown have been addressed, there is limited visibility on when the economy and earnings growth will return to previous high levels.

Do you think the fall is a correction within the bull market, or is the best phase for Indian markets over?