logo
No chill without volatility: Prateek Agrawal on playing the long game in India's new market era

No chill without volatility: Prateek Agrawal on playing the long game in India's new market era

Time of India6 days ago
In an insightful episode of the ETMarkets webinar—known for bringing front-row insights from the biggest minds in investing—Prateek Agrawal, Managing Director and CEO of Motilal Oswal Asset Management Company (MOAMC), shared his perspectives on wealth creation in today's market. He offered an in-depth look at how the fund house prepares Indian investors for the future through its focused, growth-oriented investment strategy. Moderated by Sridhar Janada, the conversation explored the philosophy underpinning MOAMC's high-performing funds, its unique position in the mutual fund landscape, and the mindset investors—especially Gen Z—need to cultivate in an age of compounding, volatility, and rapid market shifts.
The evolution of a young AMC with strong Convictions
Setting the context, Agrawal noted MOAMC's emergence as a differentiated player in India's vibrant mutual fund industry. 'We are a young AMC and, you know, being young, you learn from people who have been there before and have done it all. So we did that,' he reflected. Yet the company has not shied away from bold bets. 'We have a few firsts to our credit… focused, high-conviction investing, which we think is a very, very premium portfolio construct.'
The firm's philosophy draws heavily from the QGLP (Quality, Growth, Longevity, Price) framework pioneered by Motilal Oswal's co-founder Ramdeo Agrawal. 'This is one house that is very unique in alignment of interest… a lot of the firm's money is invested in our funds. So while we have crossed ₹1.5 lakh crore AUM, over ₹8,000 crore may be house money,' said Agrawal, highlighting how skin in the game deepens accountability.
From performance to purpose: Gaining investor trust
While much of MOAMC's growth has been attributed to performance, Agrawal believes consistent communication plays an equally important role. 'Performance may be the first thing that makes people look at us… but what we are also trying to do at the same time is to explain what we are doing.'
Live Events
MOAMC's equity-only strategy is by design, not default. 'We run funds which are focused on high conviction, but at the same time very different from the index. Our tracking error is very high—some funds have over 90% deviation from the index. We are not somebody you should think is a consistent, close-to-index performer.'
He added that for investors seeking more predictable outcomes, MOAMC offers passive alternatives. 'If you want close to index performance… Passive funds are a cheaper way of attaining the same goals. For actively managed funds, we think our constructs are very different. Come to us for growth. If you can digest volatility, we are good for you.'
High-quality growth: Not just a tagline
The tagline 'High Quality, High Growth' is backed by rigorous fund management principles. 'It comes from the QGLP philosophy of the house… ultimately markets follow earnings growth,' explained Agrawal. 'If the business grows in sales, more in profits, even better in cash flows—and does that over a long period of time, clearly the value of the business has increased.'
MOAMC's strategy is to identify narrow pockets of high-growth opportunity across the Indian economy. 'We are a medium-sized house. Our funds are small. It is possible for us to position ourselves in the nooks and corners of the market which offer this kind of growth,' he said, citing themes like electronic manufacturing, renewables, new tech, luxury, and capital markets as key areas of investment.
Volatility by design, alpha by intention
Discussing recent fund performance, Agrawal offered a transparent view: 'FlexiCap is ranked one now for three years… LMC is ranked one for all periods of its existence… Multicap has had a stellar performance.'
However, he reiterated that outperformance comes with inherent volatility. 'Don't expect close to index numbers from us. We are not built for that.' Instead, MOAMC encourages investors to pair growth-focused funds with value strategies to balance their portfolios over time.
This duality—embracing volatility while delivering alpha—is at the core of MOAMC's communication strategy. 'This is the time for alpha… We say money is being made this way; this is how we invest. There is probably a higher predictability of performance.'
Preparing for the next wave: The $5 trillion opportunity
Looking ahead, Agrawal was bullish on both the Indian economy and mutual fund penetration. 'Equities as an asset class have very low penetration in India… below 5%. As per capita income grows, it converts a country of savers into a country of investors. That journey has started.'
He believes mutual fund growth will outpace GDP growth in the coming years. 'The fund industry will grow significantly faster than the economy itself… We are very positive about the outlook. This is just the beginning.'
Gen Z and the power of compounding
In closing, Agrawal delivered a compelling message to young investors: 'Over a long period of time, what makes you money is the ability of the business to keep compounding earnings… focus on quality in combo with growth.'
He advised caution against relying on external funding for business expansion. 'If you are financing your growth through internal accruals, the predictability and sustainability of that growth is very high… The purest sense is that the organic growth you generate is constrained by your return on invested capital.'
Longevity, he added, is key. 'Longevity is super important. You start with 'L' in QGLP—spaces, which will afford you longevity of growth. One-period growth is of very little use.'
For Motilal Oswal AMC, future-proof investing is about more than just chasing returns. It is about discipline, conviction, and clarity of purpose—anchored in a philosophy that sees volatility not as risk, but as opportunity.
As Agrawal summed up: 'Alpha is here to stay… and we believe the time for growth investing has come.'
Disclaimer - Mutual fund investments are subject to market risks, read all scheme related documents carefully.
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Exclusive-Indian firm shipped explosives to Russia despite US warnings
Exclusive-Indian firm shipped explosives to Russia despite US warnings

Hindustan Times

time14 minutes ago

  • Hindustan Times

Exclusive-Indian firm shipped explosives to Russia despite US warnings

By Gram Slattery, Tom Balmforth and Shivam Patel Exclusive-Indian firm shipped explosives to Russia despite US warnings WASHINGTON/KYIV/NEW DELHI -An Indian company shipped $1.4 million worth of an explosive compound with military uses to Russia in December, according to Indian customs data seen by Reuters, despite U.S. threats to impose sanctions on any entity supporting Russia's Ukraine war effort. One of the Russian companies listed as receiving the compound, known as HMX or octogen, is the explosives manufacturer Promsintez, which an official at Ukraine's SBU security service said has ties to Moscow's military. The official said that Ukraine launched a drone attack in April against a Promsintez-owned factory. The other Russian company is a subsidiary of Spanish explosives manufacturer Maxam, which is itself controlled by New York-based private equity firm Rhone Capital. The U.S. government has identified HMX as "critical for Russia's war effort" and has warned financial institutions against facilitating any sales of the substance to Moscow. According to the Pentagon's Defense Technical Information Center and related defense research programs, HMX is widely used in missile and torpedo warheads, rocket motors, exploding projectiles and plastic-bonded explosives for advanced military systems. The HMX sale to Russian firms has not been previously reported. Russian defense manufacturers have been working around the clock for the past several years to sustain President Vladimir Putin's war in Ukraine, which intensified with Russia's full-scale invasion of its neighbor in 2022. India, which has recently forged closer ties with the United States in an effort to counterbalance China's growing influence, has not abandoned its longstanding military and economic ties with Moscow. India's trade with Russia - especially its purchases of Russian oil - has remained robust, even as Western nations have tried to cripple Russia's war economy with sanctions. U.S. President Donald Trump threatened earlier in July to hit nations with a 100% tariff if they continued purchasing Russian crude. The U.S. Treasury Department has the authority to sanction those who sell HMX and similar substances to Russia, according to three sanctions lawyers. HMX is known as a "high explosive," meaning it detonates rapidly and is designed for maximum destruction. Reuters has no indication that the HMX shipments violated Indian government policy. One Indian official with knowledge of the shipments said that the compound has some limited civilian applications, in addition to its better-known military uses. India's foreign ministry said in a statement: "India has been carrying out exports of dual-use items taking into account its international obligations on non-proliferation, and based on its robust legal and regulatory framework that includes a holistic assessment of relevant criteria on such exports." The U.S. State Department did not comment on the specific shipments identified by Reuters but said it had repeatedly communicated to India that companies doing military-related business are at risk of sanctions. "India is a strategic partner with whom we engage in full and frank dialogue, including on India's relationship with Russia," a spokesperson said. "We have repeatedly made clear to all our partners, including India, that any foreign company or financial institution that does business with Russia's military industrial base are at risk of U.S. sanctions." The State Department did not respond to a follow-up question regarding the financial stakes held by U.S. and Spanish firms in one of the Russian recipient companies. Russia's defense ministry did not respond to a request for comment. "While India has not typically been among the primary jurisdictions used for circumventing sanctions, we are aware that isolated cases can occur," Ukrainian presidential adviser Vladyslav Vlasiuk told Reuters. "We can confirm that the Russian company Promsintez has appeared on our radar in the past, including in connection with cooperation involving Indian counterparts," added Vlasiuk, President Volodymyr Zelenskiy's top sanctions official. WASHINGTON WOOS NEW DELHI Reuters identified two HMX shipments sent in December by Indian firm Ideal Detonators Private Limited, both of which were unloaded in St. Petersburg, according to the Indian customs data. An Indian government official with direct knowledge of the shipments confirmed them. One shipment, worth $405,200, was purchased by a Russian company called High Technology Initiation Systems, or HTIS, the data showed. The other shipment, worth more than $1 million was purchased by Promsintez. Both purchasers are based in Samara Oblast, near the border of Kazakhstan in southern Russia, according to the data. HTIS says on its website it produces explosives for surface and underground mining and engineering projects. It describes itself there as a subsidiary of Madrid-based Maxam, which in turn is majority-controlled by Rhone Capital, a New York-headquartered private equity firm set up by former Goldman Sachs and Lazard bankers. A source familiar with Maxam's operations said the company is in the process of divesting its Russian subsidiaries and that HTIS operates independently. Ideal Detonators Private Limited, based in the Indian state of Telangana, did not respond to a request for comment, nor did Promsintez, HTIS and Maxam. Rhone Capital declined to comment. While several Indian entities were sanctioned during the administration of former U.S. President Joe Biden for supporting Russia's war effort, sanctions were applied sparingly due to geopolitical considerations, according to two U.S. officials who worked on sanctions under Biden. Under Trump, Russia-related sanctions work has slowed to a trickle, and it is not clear if the United States will take further action against Indian companies doing business with Russia's defense industry. Washington has long sought closer relations with India to pull the South Asian country away from China. Jason Prince, a partner at Washington-based law firm Akin, said the U.S. government often prefers to communicate its concerns privately to allies and only take punitive actions as a last resort. This article was generated from an automated news agency feed without modifications to text.

Duty cuts on UK goods may aid firms more than buyers
Duty cuts on UK goods may aid firms more than buyers

Time of India

time16 minutes ago

  • Time of India

Duty cuts on UK goods may aid firms more than buyers

Union commerce minister Piyush Goyal and his British counterpart Jonathan Reynold during the signing of the Comprehensive Economic and Trade Agreement (CETA), in the UK. NEW DELHI: Government has agreed to cut tariffs on thousands of products imported from UK - from chocolates and cosmetics to cars, silver and Scotch - but reduction and elimination of customs duties will not translate into the entire benefit being passed on to consumers. To begin with, customs duty is only the basic cost of the landed price for an Indian seller. On top of that are local levies - GST or excise - which even an Indian manufacturer has to pay. And, this can be a significant portion of the final price. Take the case of alcohol, for instance, where the landed price of a bottle of the popular Johnnie Walker Black Label is estimated at around Rs 350, which at 150% customs duty sees a levy of Rs 525. On top of that, there is a 200% margin for the importer, the company, in most cases - which means an addition of around Rs 750 - taking the landed price to Rs 1,275. Then comes excise of 85% or Rs 1,084 and VAT of 25% (Rs 590), taking the wholesale price to Rs 2,950. Then comes the retail margin, pushing the cost in a market like Delhi to over Rs 3,000 a bottle. The actual price reduction for a customer will only be Rs 200-300 a bottle, a top industry executive told TOI while predicting a higher margin for companies. That's especially true for Made-in-India whisky, which blend anywhere between 1% and 25-30% Scotch imported in bulk form. "Going forward, for several MNCs operating in India, bottling in India may not be a great idea and they will simply import bottles of blended whisky," the source said. A similar situation is likely to play out in other sectors such as cosmetics too, where companies will see improved margins, said marketing executives. There is no mechanism for govt to ensure the full benefit is passed on. Although it tried to ensure the window is no longer available under GST and in any case, companies dragged authorities to court, questioning the calculations. In segments such as automobiles, competition from players will drive pricing behaviour, as will other trade agreements. For instance, with the EU deal in the pipeline, a German carmaker or Tesla may just lower domestic prices significantly to grab a bigger pie of the market. With duty reduction in several segments staggered over 10 years, price cuts are not on the immediate horizon. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now

Pharma, medical device sectors receive right prescription
Pharma, medical device sectors receive right prescription

Time of India

time16 minutes ago

  • Time of India

Pharma, medical device sectors receive right prescription

This is a representative AI image The India-UK FTA is expected to strengthen supply chains for pharma and medical devices sectors, improve access to affordable medicines, and pave the way for collaboration in bulk drugs and joint research. The domestic pharma industry is hopeful exports of generic drugs to UK - currently valued at around $1 billion - will see a boost. Sudarshan Jain, secretary general, Indian Pharmaceutical Alliance, said the pact offers opportunities to supply affordable and quality-assured medicines, contributing to better patient care in the UK. Namit Joshi, chairman of Pharmexcil, added the agreement paves the way for partnerships in bulk drug imports, CDMO, and joint research, strengthening India's competitive edge. The medical devices industry also expects bilateral trade to accelerate. "Earlier, devices imported into UK were duty-free, so tariffs weren't a concern. But regulatory approval costs & timelines were. We had sought UK recognition of Indian CDSCO or QCI certifications to fast-track approvals," said Rajiv Nath, forum coordinator, AiMeD. He highlighted need for stricter Rules of Origin checks to prevent misuse of FTA. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store