Jain said India’s valuation premium to other emerging markets has moderated but remains justified. “When you think about India’s premium to emerging markets, it has come down from a very significant premium towards long-term averages, which is still a steep premium to other emerging markets. And there are many reasons, documented over a long period of time, why India enjoys a premium. In our view, nothing has dramatically changed,” he said.
On the consumption theme, Jain acknowledged that valuations are not cheap but argued that consumer discretionary still offers stronger growth levers than staples. “Consumer staples may look expensive, consumer discretionary may look expensive, but our view is that consumer discretionary has much higher growth and profitability levers than the other segments of consumption,” he said.He added that the festive season, tax cuts, monetary easing, GST rationalisation, low inflation, and rural income recovery are all positives that strengthen the consumption story. “It just reinforces our view that consumption should be a core of your portfolio at all points of time,” Jain said.
Jain reiterated that Kotak’s philosophy is long-term, India-focused investing, with minimal portfolio churn. “We are a single-country India fund. We don’t tend to use cash as an instrument. What we do is always for long-term investing, so we don’t change our portfolios too much in that sense,” he noted.
While acknowledging that near-term sentiment around India is weak due to US tariffs, Jain sees this as an opportunity. “The mood about Indian markets is not the best at this point of time. That said, there are a lot of things working behind the channels. Maybe this is a good time to reassess India. The pessimism seems to be at its peak as we speak,” he said.
Watch accompanying video for entire conversation.
