Diversify, stay disciplined, and watch valuations, say market voices at Moneycontrol Dezerv Wealth Summit

Moneycontrol Dezerv Wealth Summit

A sharp divergence in views on Indian markets, valuations and investing discipline emerged at a recent investor panel, with speakers split between long term optimism and growing concern over frothy prices and speculative behaviour at the Moneycontrol Dezerv Wealth Summit.

Aparna Karnik, Head - Quantitative Investments and Analytics (QIA), DSP Mutual Fund, set the tone by urging investors not to anchor decisions to short term performance. “We should not look at recent past performance. As an anchor, it is worthwhile to look at long term historical averages,” she said. While Indian equities underperformed last year, she pointed out that five and ten year returns still average around fourteen to fifteen percent.

“So why are we getting bogged down by the last one year?” she asked, adding that small caps have delivered seventeen to twenty percent returns over three to five years. According to her, mean reversion has already played out and equities continue to create long term wealth.

She also emphasised the importance of asset allocation. “There is a role for all asset classes. You need equities for growth, fixed income for protection, gold and silver for inflation, and defensive assets when markets are uncertain.”

That optimism was challenged by Siddhartha Bhaiya, Managing Director & CIO, Aequitas who warned that markets are in what he called “a bubble of epic proportions.” He argued that headline valuation metrics are misleading. “This twenty PE multiple is nonsense. Excluding PSU heavyweights, the Nifty PE is more than forty.”

Bhaiya also raised concerns about promoter behaviour. “What happens in a two hundred fifty PE environment? The promoter comes in and sells,” he said, claiming that systematic investment plans have effectively turned into “systematic wealth transfer from India’s middle class to the rich.”

Saurabh Mukherjea, Marcellus Investment Managers echoed the caution, pointing to signals outside equities. “Promoters and private equity are selling every day,” he said, adding that widening spreads in double A and single A bonds show rising risk perception. He also noted that Nifty earnings growth has been stuck in low single digits for several quarters.

As a result, he advised investors to look beyond domestic markets. “India has had a good few years. Other markets will have good few years now. Diversify across markets with low correlation.”

Abhishek Tiwari CEO of PGIM India Asset Management offered a more balanced perspective, arguing that returns have broadly tracked earnings over longer periods. “From 2018 to 2023, large caps grew earnings at eleven percent and returns were exactly eleven percent,” he said, noting that excesses seen in 2023 and 2024 are now normalising.

Tiwari stressed that opportunities still exist, but increasingly at a sector and stock level rather than in broad indices. “If you think globally, there are strong opportunities in the US, volatility driven opportunities in India, and secular opportunities in markets like Korea and Brazil.”

The panel concluded with a shared message despite differing views: long term discipline, diversification and valuation awareness remain critical as markets navigate an uncertain phase.

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