Mr. Alok Singh

Chief Investment Officer - Equity, Bank of India Mutual Fund.

Mr. Alok Singh is a Postgraduate in Business Administration from ICFAI Business School and a CFA with over 24 years of experience in Fund Management. He has a wealth of experience and impressive track record in fund management both for residents as well as for overseas investors. In the past, Alok has won numerous awards for stellar fund performance during his career span. Alok heads the overall Equity & Fixed Income Investment Operations for Bank of India Investment Managers as Chief Investment Officer. Alok’s remarkable achievement includes growing the company’s Assets Under Management from ₹100 crore to approximately ₹12,000 since his joining in April 2012.

Please note we have published the answers as it is received from the Fund Manager of Bank of India Mutual Fund.

Q1. Q2 earnings were strong with double-digit profit growth and improving sales momentum. How do you anticipate this trend evolving over the next few quarters, especially in terms of demand visibility and margin trajectory?

Answer: Q2 FY26 earnings clearly suggest that the downgrade cycle that weighed on markets for the past year appears to be nearing its end. After cumulative cuts of nearly 8–10% over the last four quarters, consensus downgrades have moderated to a large extend in recent updates, signaling improved stability and a potential shift toward earnings normalization. Importantly, consumption demand appears to have remained resilient beyond the festive season, suggesting that the momentum could carry into the fourth quarter as well.

Q2. The IPO market has seen strong demand and oversubscriptions across categories. Do you believe the current IPO momentum is driven by fundamentals or excess liquidity? Are valuations in the primary market getting stretched?

Answer: We hold a mixed view on the ongoing IPO season. While not all offerings appear stretched in terms of valuation, a few represent genuinely good and unique businesses, with some issuers seeking growth capital to scale further. However, in several cases, valuations are not compelling, the businesses lack a clear competitive moat, and a significant portion of the proceeds is being raised through Offer for Sale rather than fresh capital infusion.

Q3. The US AI rally has surged while India has stayed on the sidelines. Does India have the ecosystem to participate meaningfully, and should investors view its limited participation as a risk or as protection from overheated valuations?

Answer: Artificial Intelligence represents one of the most significant innovations of our time. In the initial stages of any breakthrough, its propagation and usage are largely controlled by the original innovators, and India has not been part of that early innovator club. However, as the technology matures and stabilizes, India is well-positioned to emerge at the forefront. The country’s digital ecosystem is evolving rapidly, with several platforms and infrastructure elements already among the best in the world. We believe this creates a strong foundation for AI adoption and integration across industries in India, ensuring that investors will not be disappointed in the long run.

Q4. Do you follow a growth, value, or blend-oriented investing style, and what specific factors or signals determine which style you lean toward at any point in time?

Answer: We follow a blend-oriented investment style that combines elements of both growth and value strategies, with a strong emphasis on businesses delivering sustainable Return on Equity (ROE) over the medium term. Our approach is dynamic and guided by the prevailing level of economic activity-robust, broad-based growth typically favors a growth tilt, while periods of moderation call for a more value-conscious stance. In addition to ROE, we evaluate factors such as balance sheet strength, cash flow visibility, and industry positioning to ensure resilience across market cycles.

Q5. With the rapid evolution of smart-beta products and increased use of quantitative screening in portfolio construction, how is your AMC integrating these tools into its investment process? Do you see quant-driven frameworks becoming more relevant for alpha generation, or will they remain complementary to traditional fundamental research?

Answer: Data analytics capabilities and the quality of available data are undoubtedly improving, which will enable us to incorporate more model-driven approaches into our investment process. However, we believe these tools should remain complementary to fundamental research. India is a fast-growing economy where businesses are undergoing significant structural changes, and these shifts continuously influence investor understanding and expectations. Given this dynamic environment, we expect that a human edge-deep qualitative insights and judgment-will continue to be essential for generating alpha in the foreseeable future.

Q6. Many investors focus heavily on short-term returns before choosing a mutual fund. From your perspective, what are the right long-term metrics or framework investors should evaluate to judge whether a scheme is suitable for them?

Answer: Each portfolio, based on its construct and exposure, may exhibit short-term trends that are often unsustainable over the long run due to market dislocations or temporary factors. Therefore, investors should place greater emphasis on consistency of performance over extended periods rather than being swayed by near-term fluctuations. Scheme selection should be done after considering the long-term risk-adjusted returns of portfolio and its alignment with the investor’s financial needs..

Note: Views provided above are based on information in the public domain and subject to change. Investors are requested to consult their mutual fund distributor for any investment decisions.

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Mr. Rahul Pal

Chief Investment Officer - Fixed Income, Mahindra Manulife Mutual Fund

Mr. Rahul Pal is a Chartered Accountant. Prior to joining Mahindra Manulife Investment Management Private Limited, he was associated with Taurus Asset Management Company Limited as 'CIO - Fixed Income'. He has also worked with Sundaram Asset Management Company Limited as 'Fund Manager - Fixed Income'. In these roles, he was responsible for managing and overseeing the Fixed Income Portfolios.

Please note we have published the answers as it is received from the Fund Manager of Mahindra Manulife Mutual Fund.

Q1. The U.S. Federal Reserve recently cut rates by 25 bps, while the RBI chose to hold its policy rate steady at 5.5%. How do you interpret this policy divergence, and what implications does it have for capital flows, yield differentials, and the broader Indian debt markets?

Ans: The U.S. Federal Reserve's recent 25 bps rate cut, bringing the federal funds rate to 4.00-4.25%, marks a pivot toward accommodative policy amidst a softening labour market and political uncertainty due to the government shutdown. The RBI though held its repo rate steady at 5.5%, citing robust GDP growth (7.8% in Q1 FY26), benign inflation (1.54% in September), and maintained neutral stance. 

This divergence reflects idiosyncratic domestic macro conditions:

• Fed's cut aims to pre-empt labour market deterioration, support growth amidst fiscal challenges

• RBI's pause signals confidence in India's growth trajectory and inflation containment, while presenting itself space for further policy accommodation.

Implications:

• Capital Flows: A narrowing India-U.S. yield differential (now ~200-225 bps) reduces the relative attractiveness of Indian debt for foreign investors. This has already triggered FPI outflows from Indian bonds, particularly Fully Accessible Route (FAR) securities. 

• Currency Pressure: Reduced inflows may exert mild depreciation pressure on the INR, though India's FX reserves and trade resilience offer buffers.

• Impact Domestic Debt Markets: The RBI's pause supports stability in short-term yields, while long-end yields may remain sticky due to global volatility and possible elevated commodity price pressure .However there have been recent news on possible challenges in US Credit market and should it have a contagion , the rush to safe heaven (possibly US treasuries) may trigger a likely RBI action.

Q2. With the Fed's rate cut signaling a potential shift in the global interest rate cycle, do you expect the RBI to follow suit in the coming quarters?

Ans: While the Fed's pivot suggests a global easing cycle, the RBI remains cautious. Its October policy emphasized domestic resilience, low inflation, and the need to allow full transmission of earlier rate cuts.

While a low benign inflation does open space for a possible rate action by the Monetary Policy Committee (MPC) of the RBI, we believe global risk off trades, should they materialize, may prompt the MPC for deeper cuts.

Q3. The RBI has revised its inflation projection for FY26 downward to 2.6% from 3.1%. How do you view this assessment - is the inflation trajectory comfortably within control, or are there still risks that could emerge?

Ans: The RBI's downward revision from 3.1% to 2.6% for FY26 reflects confidence in food price moderation, GST rationalisation, supply-side improvements, adequate rainfalls

Supportive Factors:

• Record agricultural output and buffer stocks.

• Negative food inflation in rural areas.

• Core inflation largely contained, barring precious metals. 

Risks to Watch:

• Hard Commodities already inching up

• Sticky services inflation and gold-driven core CPI.

• Tariff-related supply chain disruptions.

• A low food inflation may possibly mean lower incomes for Agriculture dependent households prompting a possible fiscal support to such households

Q4. Retail participation in debt mutual funds has been gradually rising again post-taxation changes. Are investors leaning towards short-term safety or long-term accrual strategies?

Ans: We believe debt mutual funds offer offers a diversification choice in terms of asset allocation, competitive returns vis traditional fixed income products and easy liquidity.

Investors, predominantly, are investing in debt mutual funds for various reasons: a volatile equity market resulting in a vehicle for temporary investments, as an asset diversifier and returns possibly higher than traditional fixed income products.

Q5. What are the key risk indicators you are monitoring for Indian debt markets over the next 6-12 months, and how resilient do you expect the market to be against potential shocks such as a sudden global rate spike or US Treasury yield volatility?

Ans: The key risk indicators for Indian Debt markets 

1. The low inflation regime is predominantly due to low food inflation; Food inflation is a very difficult factor to forecast and the margin for errors may be large. As food inflation is almost 45% of the CPI basket, assuming a secularity in food inflation is a key risk marker.

2. Hard Commodities, copper and aluminum have been inching up, which may risk inflation on the higher side

3. Geo Political conditions, if they ease , may surprisingly also bring up inflation as war ravaged zones of Middle East and Ukraine bring about reconstruction efforts and possibly a commodity price pressure

4. While there are initial narratives on credit challenges in US, these challenges will be a one of the key markers

Q6. In this environment of global rate adjustments, currency pressure, and moderating inflation, what would be your preferred strategy for positioning debt portfolios - duration play, accrual focus, or a balanced approach?

Ans: We believe a balanced approach is a desirable option with a possible 60% focused towards accrual and the rest towards a duration focus.

Note: Views provided above are based on information in the public domain and subject to change. Investors are requested to consult their mutual fund distributor for any investment decisions.

MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY

Ms. Fatema Pacha

Fund Manager - Equity, Mahindra Manulife Mutual Fund

Ms. Fatema Pacha has over 19 years of work experience of which around 15 years have been in the field of equity research and fund management. Prior to joining MMIMPL, she was associated with ICICI Prudential Life Insurance and UTI Mutual Fund. She holds a PGDBM (Finance) from SP Jain Institute of Management & Research, Mumbai and a BE (Computers) from Thadomal Shahani Engineering College, Mumbai.

Please note we have published the answers as it is received from the Fund Manager of MAHINDRA MANULIFE Mutual Fund.

Q1. The year 2025 has been quite challenging for Indian equities, while commodities like gold and silver have outperformed. Given this divergence, how do you assess the current market structure and valuation trends within the Sensex and Nifty?

Ans: We have to always remember the 15% CAGR return rule that Indian equities have delivered over longer periods of time. There tends to be excesses on the top and bottom and that ensures period of time and price correction.

If we compare valuations for Nifty/Sensex the earnings rollover has made Nifty cheaper and it now trades at 20x FY27. Also, last year the valuation gap between India & the world was quite high. However, in the last 12 months with India under performing Emerging Markets our valuations have converged even versus the region making it attractive for global investors.

Gold & Silver have given stellar returns and many investors feel they have missed the rally. However, we would like to remind that generally peak and bottom is formed on greed and fear and investors have to be extremely mindful about asset allocations.

Q2. We've seen a surge in IPO activity this year. How do you assess current market valuations, and do you believe the post-listing performance of new issues is sustainable?

Ans: Around 80 companies have raised around $14 billion, nearly Rs 1.17 lakh crore in 2025 so far, compared to 91 companies that mobilized Rs 1.59 lakh crore in 2024. The numbers still look large, but both in terms of count and size, there seems to be moderation, even as the retail frenzy around IPOs remains visibly high.

There is a strong pipeline of upcoming IPOs with over 200 companies and an estimated issue size of about Rs 2.9 lakh crore. Instead of growth-driven issuances, a larger portion of new capital is being channeled toward debt repayment, promoter exits, and general corporate purposes.

CY25TD have seen 15% of IPOs sustain > 25% listing gains and 31% IPOs are below IPO price. Clearly shows the divergence between subscription frenzy and post-listing returns.

Q3. Corporate earnings have been muted in recent quarters. With the government's fiscal push and GST-related gains, when do you expect to see these factors translating into improved corporate balance sheets?

Ans: Corporate earnings have been muted last year in H2 and has had some impact in Q1 as well. However, Q2 earnings growth is seeing improvement and we believe FY26 can report 8-9% Nifty EPS growth. FY27 earnings growth estimates are yet strong at 14-15%. Short term GST transition issues aside, we believe the Income tax cut of the budget and the GST rate cut will lead to improved demand conditions translating into improved corporate revenue and profit growth.

Q4. As we enter the festive season, what are your expectations for the equity markets in October? Do you foresee any short-term momentum or sectoral themes playing out?

Ans: Market has been in a time correction mode and we have had significant FII selling in the last 12 months. Incrementally we believe that the US trade deal may be signed soon. Valuations are not as expensive as before and corporate earnings growth has started to improve. We are positive on Financials and Consumption themes.

Q5. What approach would you recommend for long-term investors for the remainder of 2025, given the current market and macroeconomic environment?

Ans: We believe asset allocation remains key for investors in their journey of wealth building . The allocation is applicable to both equity as an asset class as well as choice of market capitalization within equities. From investors perspective, we continue to believe that an aggregate large cap offers better value and margin of safety as compared to micro caps, small caps & mid-caps.

Investors with near-term objectives or low risk appetite can opt to prefer Equity Hybrid Funds or asset allocation funds. Investors with a longer-term horizon can continue to remain invested with fresh equity allocation towards large caps.

Q6. How vulnerable do you think Indian equities are to global macro risks such as rupee depreciation, rising US interest rates, elevated oil prices, and the ongoing US government shutdown concerns?

Ans: Currently we believe the major risk facing the world economy is geopolitical risks from Trump decisions on trade tariffs across all countries. As the resultant impact of the tariffs on the US economy and inflation is unknown. US and global equity markets along with gold & silver have been in a strong momentum phase. So, the major risk for India can be the unwinding of the global risk-on trade. However, considering our markets have gone through consolidation (time correction) in the last 12 months, Indian markets may emerge as a relative outperformer in the event of a global risk off scenario.

Note: Views provided above are based on information in the public domain and subject to change. Investors are requested to consult their mutual fund distributor for any investment decisions.

MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY