Why SBI Mutual Fund’s Navneet Munot Is ‘Anxiously Excited’ About Indian Equities  

India's equity market is offering a ‘once in a lifetime opportunity' to investors who select stocks from a bottom to top approach, especially in sectors that have taken the worst beating amid the coronavirus pandemic.

That's according to Navneet Munot, chief investment officer at SBI Mutual Fund, who said such opportunities are already available, despite the market having partially recovered from its lows in March.

“Until two months back, great businesses were not available at reasonable valuations,” Munot said in a virtual panel discussion for the PMS AIF World Covid-19 To Wealth 20 event. “If you have time on your side they're going to be very exciting opportunities.” He, like most fund managers and market experts, advised investors to go long term.

Where Munot differs is that he sees these opportunities in sectors most affected in the near term due to the global pandemic and subsequent lockdowns across the world. Travel, for one, will not remain subdued forever as this isn't the end of business travel or people taking vacations. Even in the hospitality sector, while it's not clear what will happen one year down the line, it is clear that this is not the end of hotels, he said.

Munot isn't the first to argue in favour of “once in a lifetime” opportunities since the pandemic led to a global equity selloff, including one in India. Hiren Ved, co-founder of Alchemy Capital, had said the same in the last week of March—a month when indices declined by around 23 percent. Since then, the Nifty 50 has risen 30 percent, to above 9,800 from the lows of around 7,500. However, it is still substantially below February's levels of above 11,500.

‘Anxiously Excited'

Asked about his sentiment towards the current market, Munot said he's “anxiously excited”. “Anxious for the reasons that nobody really knows how the situation will pan out so I wouldn't want to put a huge bet on that,” he said, but excited because individual stocks that have the resilience and ability to survive the crisis and further capitalise on the coming consolidation, will likely earn money for their investors.

Investors should scrutinise individual companies, take the worst possible scenario over the next few quarters and see whether the company has a strong balance sheet or the ability to raise capital if need be, he said.

Watch the full conversation with Navneet Munot here: