Interview: ‘Market can be shocked’ – Interview Market Can Be Amazed

Mukul Kochhar, head of Institutional Equities in Investake India, says the decline in the market has created a favorable investment environment, even if the investor perception has remained dull. In an email interview given to Sameh Modak, Kochhar said that the most reliable investment approach is to choose a low -price stock and maintain it for a long time. Excerpts of the conversation:

Has the market become attractive after selling?
Evaluation often reaches a more attractive level when market perception is weak. We recently hosted our annual promoter and founding conference in which around 6,000 investor meetings associated with more than 100 companies were held. The current mood between both companies and investors was very dull. Despite this, we believe that recently the market fall has made a favorable scenario for investment. The forward multiple of the Nifty is currently around 17 times that below its long -term average. This indicates proper evaluation. But even after the decline, the NSE midcap index is trading at 38 percent premium against the Nifty which is close to the upper end of its historic realm.

Do you expect fast recovery like recent times or will it take time to make up for the loss to the market this time?
Recovery and bottom in the equity market are always seen from the past point of view, making forecast about their time risky. Instead of trying to forecast market fluctuations, it is more effective to focus on identifying low-price or high-priced shares. At the same time, wait for the factors that will highlight their actual value.

What are the major domestic and global challenges?
Domestic challenges include the slow pace of national politics and reforms. In the world moving towards bilateral trading agreements, India needs to join with the trading blocks of the developed market. Talking about the global front, dull economic growth is a challenge for markets because the largest economy (America) in the world is focusing on reducing its size and expenses. As a result, the US growth is expected to be slower by 2.8 percent in 2024 to be 2.3 percent in 2025.

Has China’s rise reduced India’s attraction?
Since the end of September, the Chinese market has withdrawn money from the Indian market with a boom. Also, ‘Trump Trade’ and the strengthening of the dollar also increased the selling pressure. These factors and high values ​​in the Indian market have promoted capital withdrawal and increased the rupee fall. This monetary weakness has weakened the perception more and has increased selling of foreign institutional investors. The cycle of strength has continued. But we are hoping to turn it in the short term. Foreign withdrawal may stop due to normal prices in India, softening of dollars and improving trade conditions.

Which areas are positive and negative on which areas?
We are excited about the finance and include big banks, insurance companies and capital market firms. We have adopted a positive attitude on vehicles, pharmaceutical and desirecular consumption areas- especially alcoholic beverages and good quality jewelery as well as utilities. In industries, we have preferred special chemical companies, major construction firms and special electronic construction service providers. In contrast, we remain underweight on consumer staples and information technology.

First Published – March 19, 2025 | 11:00 PM IST

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