'A stock picker's paradise': Why HDFC AMC's Navneet Munot is bullish on India

Navneet Munot, MD and CEO of HDFC AMC

When it comes to the outlook for India, HDFC AMC’s managing director and chief executive Navneet Munot is confident in India’s growth story.

“I remain very confident about the long-term fundamentals of India's growth story. And to our investors, our message has been that I think they should continue to invest in the disciplined manner that they have been investing,” Munot said, while speaking at an Association of Investment Bankers of India (AIBI) conference on January 21.

He said that despite a valuation trajectory that appeared to run ahead of fundamentals, recent market corrections were described as a natural and necessary adjustment. "Narrative became more important than numbers," Munot said, noting that this correction strengthens the foundation for long-term growth.

According to the top fund manager, India is a "stock-picker’s paradise," with an expanding universe of investment opportunities. "From a top-down macro perspective and a bottom-up stock-picking view, India offers unparalleled opportunities," he said.

Munot also noted that India had an advantage of a young demographic. "A large part of the world is aging, versus India, which has a very positive demographics over the next 20 years. The country is likely to add around 20 crore more people to its labor force, while China will lose a similar number," he said.

He also pointed out that as India builds infrastructure and creates growth momentum, it will do so very differently than how the world has traditionally approached those challenges. "The more I look at the world, the more I feel positive about India," he said.

On regulation and IPOs

Munot also touched upon regulation adding that recent regulatory measures aimed at protecting retail investors and curbing market excesses. "There were parts of the market where clearly fraud was bidding. Regulators have addressed these issues through actions in the F&O market and other corrective measures."

Further, he noted that 2024 was a challenging year globally for IPOs and primary fundraising, except for India. "India was an exception, both in terms of the number of IPOs and the money raised. That shows the robustness of the Indian market," he said.

Power of domestic money

He also spoke about how the influx of domestic money was a key driver for India’s success. "SIP flows are almost $3 billion a month, contributing $36 billion annually to the mutual fund industry. Combined with other domestic investments, this figure exceeds $50-$60 billion. These are the early days of the financialization of savings," he said.

He added, "Indian markets, once heavily reliant on foreign money, were vulnerable to global liquidity and sentiments. But the constant flow of domestic money will structurally reduce this volatility."