PMS Bazaar has just released a magazine featuring articles & interviews from Fund Managers. In this blog, we've selected and gathered excerpts from an Exclusive Interview with Mr. Vaibhav Agrawal, the Fund Manager at Motilal Oswal Asset Management, featured in the Magazine, covering his expertise and viewpoints on the India market outlook for 2024.

Navigating the Market Landscape

Mr. Vaibhav Agrawal initiates his discourse by outlining his outlook for the Indian markets in the fiscal year 2024. He presents an insightful analysis grounded in an 18-18.5 multiple to a year-ahead index EPS. Projections for Nifty's consensus EPS, estimated at around 950 for FY24 and 1100 for FY25, offer key insights. This analysis points towards a year-end Nifty target within the range of 19500-20000, indicative of a growth rate of approximately 10% from the current state. Mr. Agrawal emphasizes that this forecast indicates a gradual index compounding of under 1% per month, indicating an anticipated period of market consolidation.

Seeking Sustained Growth in Evolving Economy

With the economy's recovery and normalization, Mr. Agrawal notes that achieving sustainable substantial growth becomes a more intricate task. He underscores the heightened value of companies demonstrating consistent growth, fostering an environment conducive to high-quality, high-growth-focused investing. Additionally, he highlights the potential benefits of reduced yields resulting from lower inflation or economic slowdown, which is particularly advantageous for this investing approach.

The 'QGLP' Investment Approach

Mr. Agrawal delves into the investment approach employed at Motilal Oswal Asset Management, elucidating their three-step process known as 'QGLP': Idea Generation, Business Analysis, and Financial Evaluation. This comprehensive methodology commences with screening sector fundamentals and incorporates external inputs for a holistic evaluation of companies. The criteria encompass Business, Management, and Financial parameters, ensuring a meticulous assessment.

Focusing on Growth Themes

Addressing the focal themes of the Motilal Oswal Founders Fund, Mr. Agrawal accentuates several growth-driven sectors. He underlines the premium commanded by businesses exhibiting robust growth, particularly within domains such as retail-oriented private banks, new-age tech firms, hospital infrastructure, premium discretionary spaces, engineering, defense capex, and more. He also underscores the burgeoning opportunity arising from the global supply chain shift away from China, which presents a substantial avenue for various industries.

Effective Risk Management: A Prerequisite for Success

In terms of risk management, Mr. Agrawal underscores the importance of consistent returns alongside robust risk management processes. He offers insights into the enhancements to their risk management framework. This involves strategies to manage stock weightage, sector sizing, diversification, profit-taking, stop-loss mechanisms, and stringent liquidity management. These measures serve to uphold stability while navigating the dynamic market landscape.

If you find this blog informative and look forward to reading the Exclusive Interview of Mr. Vaibhav Agrawal, then check out our July Edition Special Edition Magazine – Click HERE.