India’s Macro Picture Intact Amid Global Jitters, Says Motilal Oswal AMC’s Prateek Agrawal

India's macroeconomic setup remains strong despite external volatility, and investors should not let short-term market jitters distract from the long-term opportunity, according to Prateek Agrawal, Managing Director and Chief Executive Officer at Motilal Oswal Asset Management Company.

He believes the pessimism seen in recent months is overdone, especially now that global headwinds related to tariffs are easing and domestic earnings growth is intact.

“India still comes out a net winner — oil prices are sharply down, the rupee has bounced back to December 2024 levels, and the dollar index is now below 100,” Agrawal told NDTV Profit in a recent interaction. “The macro looks good, but markets haven't behaved accordingly, which is where the opportunity lies.”

He attributed the recent underperformance of Indian equities to a confluence of factors including a spike in US bond yields, currency volatility and foreign investor outflows led by yield-focused global strategies. “There was a lot of inward repositioning — people were playing the yield trade, and the performing parts of the market got hit disproportionately,” he said.

However, he sees those pressures reversing. “Bond yields have started to fall, oil is down sharply, and foreign investors are coming back. India is as nicely sold a story as possible — it should do well globally,” Agrawal said.

He acknowledged that a slowdown in the West, caused in part by import duty increases, has weighed on global trade and exports. Still, India's domestic story remains largely insulated, in his view. “There's some slowdown in results, but one has to see beyond the index. Many sectors seeing strong growth are not even part of the index in a meaningful way,” he added.

Prateek Agrawal ,MD and CEO, Motilal Oswal AMC (Image source: LinkdIn)

Agrawal's Top Picks

Agrawal prefers stocks that reflect the shift towards India's new growth engines — sectors like electronics manufacturing services, renewable energy, new-age tech, luxury consumption, and capital market-linked businesses such as asset and wealth management.

“These are not yet fully reflected in the index, but are seeing much faster growth. One should focus there rather than only on legacy sectors,” he said, adding that companies in these segments can deliver 25%+ earnings growth even when the broader market appears sluggish.

He is also bullish on power demand themes, driven by the twin trends of rising manufacturing intensity and growing cooling needs. “Renewables are a multi-year story, and the equipment makers — solar, wind, transformers — are the better way to play it,” he said.

Among financials, Agrawal continues to back life and general insurance, as well as capital market intermediaries, saying these are still underpenetrated and growing rapidly.