On the journey of Sensex over time
Navneet Munot: I knew the market when Sensex was 400. Nifty was not there. We have now seen the journey from 400 to 4,000, 4,000 to 40,000, and 40,000 to 80,000. And through this era, there would have been many quarters the place we mentioned one thing like this, why soaps should not promoting or why the IIP is decrease or the charges have gone up or inflation, many issues on the planet, many issues in India. However in the identical interval, we have now seen the journey of 400 to 80,000.
We have now the HDFC Flexi Cap Fund, which is celebrating 30 years of existence subsequent month. Throughout these 30 months, if anyone did an SIP of Rs 10,000 monthly, will probably be price nearly Rs 20 crore right this moment. Now, I’m from the mutual fund trade. As a accountable fund supervisor, I’ve to say mutual funds are topic to market threat. Please learn the provide doc fastidiously, as a result of I’m providing you with the previous knowledge they usually might not information the place the longer term can be.
However what it reveals is the compounding story India has. There are only a few globally. Apart from United States, there should not many international locations on the planet Earth which have achieved one thing like this the place an financial system is rising constantly at a really respectable tempo, nominal GDP development of 10-11% over 30 years, you have got a company sector which may convert that development into their revenues and income and you’ve got a capital market the place these income get transformed to the return to the minority shareholder. Then there’s the mutual fund trade which delivers these returns to an investor who invests solely Rs 500 monthly. This has not occurred in lots of locations.
There isn’t any purpose to consider that the following 30 years wouldn’t be as thrilling. There would certainly be a number of quarters like this. It isn’t linear, that’s the nature of the beast. There will probably be these bubbles. These will burst however that’s the nature of the beast. However between that, the actual trick is simply staying invested and reaping the good thing about the expansion prospect that India has.
Let’s assume that this cycle was born within the throes of COVID – it began in 2020 or 2021. Each bull market has an age. It follows, it mounts the wall of disbelief, then there’s participation, then there’s pleasure, then there’s bubble, after which there’s a burst. The place are we on this bull market cycle?
Navneet Munot: No, I feel we’re seeing a cyclical slowdown. I don’t assume it’s structural, perhaps for quite a lot of causes. I’m positive a number of different audio system would have talked about it. Perhaps the city consumption has moderated from the expansion that it had for quite a lot of causes, together with perhaps the meant tightening of lending to households, notably the unsecured lending which will have some penalties. Some individuals are saying, I actually have no idea whether or not there’s a correlation, however the cash that has been misplaced by retail merchants within the F&O market perhaps that would have gotten into consumption as a result of that acquired in all probability concentrated in a couple of arms and they don’t seem to be spending a lot. Wherever they’re spending on a home in South Bombay or a luxurious automotive, I feel these markets have been doing nicely. Due to the elections, the capex slowed down a bit of. When you see these orders and the opposite issues fall in place and now with perhaps the inflation easing, if we get fortunate, the financial easing cycle begins. I really feel very optimistic concerning the subsequent yr. There are challenges on the planet, the sort of transformations, the tempo of change is accelerating, whether or not it’s geopolitical or technological – no matter is going on on the planet of AI – all of that can have large repercussions. India has all the time come out nicely and I don’t see any purpose to not.
