Saurabh Mukherjea On How To Crush Risk While Investing In Indian Equity

India isn't a country to take risks in, and doing that usually results in being “taken out on a stretcher”. That's the word from Saurabh Mukherjea, founder of Marcellus Investment Managers, who believes it's safety that rewards in the nation's equity market.

The focus of investing—in a bull or bear market—is to crush risk as heavily as you can, he said. This can be done by clearing out companies with accounting and governance risks, rule out those with volatile revenue (such as automobile, metals and real estate) and those with a risky profit margin, Mukherjea told BloombergQuint in an interaction.

“You can make money in India if you buy strong compounder, strong franchisers and strong cash flow firms like Asian Paints, Kotak Bank, HDFC Bank,” he said, adding that investors have earned money from these stocks for many years.

Having invested in these companies itself, the fund has outperformed the market by 300 basis points in July alone, Mukherjea said.

Speaking about valuations, the founder said while it's apparent India is overvalued, remaining focused on that won't be beneficial for investors.

Watch the full conversation here: