Indian equity markets have extended their winning streak, registering gains for the tenth year in a row in 2025, even as smallcap stocks lagged broader benchmarks, according to Navneet Munot, Managing Director and CEO of HDFC Asset Management Company.
Munot said the overall market resilience reflects a stronger macroeconomic foundation, supported by improving relative valuations, a competitive rupee, and signs of an earnings recovery cycle. While frontline indices continued to deliver steady returns, broader market participation remained uneven, with smallcaps underperforming amid valuation concerns and selective risk appetite.
He noted that after a period of excesses in parts of the mid- and small-cap space, the current environment appears more balanced. “Relative valuations are now more comfortable, macro stability remains intact, and corporate earnings are gradually reviving—together creating a better pitch for equities,” Munot said.
The HDFC AMC chief added that India’s structural growth story remains compelling, backed by policy continuity, strong domestic demand, and improving corporate balance sheets. However, he advised investors to stay selective and disciplined, especially in segments where valuations still appear stretched.
Looking ahead, Munot believes markets could see broader participation if earnings growth sustains and global conditions remain supportive, but cautioned that volatility cannot be ruled out in the near term.
Overall, despite pockets of underperformance, India’s ability to deliver a decade-long run of positive market returns underlines the depth and durability of its equity markets, he said.
