Mr.Trideep Bhattacharya

Equities - Chief Investment Officer, Edelweiss Mutual fund

With PGDBM in Finance from SP Jain Institute of Management & Research, Mumbai and B.Tech in Electrical Engineering from IIT, Kharagpur, meet our CIO Equities – Mr. Trideep Bhattacharya.

Trideep comes with over two decades of experience in Equity investing across Indian and Global markets. Prior to joining Edelweiss AMC, he was instrumental in building a market leading PMS business at Axis Asset Management Company, as Senior Portfolio Manager – Alternate Equities.

He has also spent a significant amount of time as a Portfoslio Manager at State Street Global Advisors and UBS Global Asset Management (London, UK). When not occupied with work, Trideep loves playing Tennis, Bridge and is hands on with few musical instruments.

Q1. Despite geopolitical concerns, the market has started picking up momentum. Where do you see the market trend heading?

Ans: We perceive that the "uncertain" macro-environment, influenced by geopolitical tensions and local elections, obscures the underlying economic vitality of India Inc. This momentum is particularly evident in specific sectors such as capex, real estate, and defense, among others.

Consequently, we regard the volatility stemming from these macro-conditions as a chance to invest in exposure to the aforementioned sectors through mutual funds. We anticipate that the resilience in earnings will be mirrored in buoyant share prices in the long term.

Q2. In FY24, numerous stocks have seen significant gains, turning into multibaggers. However, it's well-known that leadership positions shift in each cycle. Which sectors do you anticipate will lead the next bull run in the markets?

Ans: Assuming macro-stability at the center, we foresee manufacturing-related sectors/themes continuing to lead the way in equity markets. With India Inc.'s capacity utilization hovering around the late 70s, we anticipate the central government will likely aid capital formation within Indian economy in the coming years.

Consequently, we surmise that Industrials/capital goods, Real estate, Defense, and Power-related sectors will spearhead sector leadership in the foreseeable future.

Q3. Do you foresee an increase in Foreign Institutional Investors (FIIs) flows following the election results? Or do you believe that the results don't significantly influence FII inflows, with decisions primarily driven by central bank interest rate structures?

Ans: We anticipate a decline in the Indian equity markets' dependence on Foreign Institutional Investors (FIIs) in the future, driven by consistent inflows from domestic sources such as SIPs and pension-related contributions.

Furthermore, we observe that the earnings resilience of Indian companies stands out favorably compared to other global economies. Although valuations may seem high, we expect the relative strength of earnings resilience to attract FII inflows into India over time.

Q4. What insights can we derive from the fact that the total number of folios in the Indian mutual fund industry has doubled over the past five years, reaching 17.79 lakh crore? How does this reflect on the growth of equity culture?

The doubling of the total number of folios in the Indian mutual fund industry over the past five years, reaching 17.79 lakh crore, indicates several significant insights.

Firstly, this growth reflects an increasing participation of retail investors in the Indian mutual fund market. As more individuals invest in mutual funds, it suggests a growing awareness and acceptance of mutual funds as a viable investment option.

Secondly, the expansion of the mutual fund industry points towards a deepening equity culture in India. Traditionally, Indians have favored safer investment avenues like fixed deposits and gold. However, the rising number of mutual fund folios suggests a shift towards equity investments, indicating a growing confidence among investors to take on market risks for potentially higher returns.

Additionally, this growth in mutual fund folios signifies a broadening of the investor base beyond urban centers to smaller towns and cities. As mutual fund distributors and online platforms reach out to a wider audience, more people from diverse socio-economic backgrounds are participating in the equity markets through mutual funds.

Overall, the doubling of folios in the Indian mutual fund industry reflects a positive trend towards the democratization of investing and the development of a robust equity culture in the country.

Q5. What are your thoughts on the earnings for the March quarter? What insights are you gathering from the management commentary?

Ans: The Nifty-50 Index has witnessed a 14% year-on-year growth in earnings for the March quarter of FY24, aligning closely with our projections. However, a closer examination reveals a dichotomy in the results of the March quarter FY24, with a positive trajectory for Industrials/Infrastructure/Capital goods sectors juxtaposed against a downturn for consumption-oriented stocks.

While companies benefiting from the India capex theme demonstrated resilient earnings, there was widespread weakness observed in consumption-oriented stocks, particularly those exposed to the lower income and rural segments of the economy. Some company managements expressed optimism regarding a potential rural recovery contingent upon favorable monsoon conditions.

Q6. What advice would you offer to Generation Z who have recently entered the workforce? How should they begin constructing their portfolio?

Ans:For Generation Z individuals who have recently entered the workforce, constructing a portfolio that aligns with their financial goals, risk tolerance, and time horizon is crucial. Here are some tailored pieces of advice:

1.Start Early and Stay Consistent: Take advantage of the power of compounding by starting to invest as early as possible. Consistency is key, so commit to investing a portion of your income regularly, even if it's a small amount.

2.Diversify Your Portfolio: Spread your investments across different asset classes such as stocks, bonds, mutual funds, and possibly alternative investments like real estate or commodities. Diversification helps reduce risk and maximize potential returns over the long term.

3.Assess Your Risk Tolerance: Determine your risk tolerance based on factors like your age, financial goals, and comfort level with market fluctuations. Younger investors generally have a higher risk tolerance since they have more time to recover from market downturns.

4.Stay Disciplined and Patient: Investing is a marathon, not a sprint. Stay disciplined in sticking to your investment plan and avoid making emotional decisions based on short-term market fluctuations. Patience is key to realizing the full potential of your investments over time.

5.Seek Professional Advice if Needed: If you're unsure about how to construct your portfolio or navigate the investment landscape, consider seeking advice from a financial advisor. A professional can provide personalized guidance based on your individual circumstances and goals.

By following these guidelines, Generation Z can lay the groundwork for a solid investment portfolio that sets them on the path toward long-term financial success.