Market crises are becoming more frequent and that’s not bad news, says HDFC AMC’s Setalvad

Chirag Setalvad, Head of Equities at HDFC Asset Management Company, which manages funds worth nearly ₹5,900 crore, said market crises are now more frequent due to global interconnectedness and should be viewed as part of the investing cycle.

“In my career of 25 years, we’ve had three or four massive crises,” he said, adding that such events create long-term investment opportunities.

“I think that is really unusual, and that will persist going forward. The earlier generation saw one every 20 years. Now you see it once every 10 years. But is that bad news? No, that's fantastic news. You want crisis events to take place so that we can hopefully take advantage of it.”

Speaking at the 16th India Investment Conference organised by CFA Society India, he stressed that investors should remain focused on long-term goals and avoid reacting to short-term market swings.

IPO valuations turn reasonable

Valuations in initial public offerings (IPOs) are becoming more reasonable, but stock markets may remain in a consolidation phase for some time, Setalvad said.

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Setalvad said investors are overly focused on recent weak performance, even though long-term returns remain strong.

“Last five-year returns are still in their 20s,” he said, adding that markets have delivered solid gains over longer periods despite the recent slowdown.

Markets still above long-term averages

Setalvad said Indian equities are still trading above historical averages, with the Nifty, mid-cap and small-cap indices at premiums to long-term valuations. He said corrections of 15–20% would be needed to bring valuations closer to average levels.

“Consolidation will continue for some time, until valuations normalise,” he said.

He added that global factors will play a major role in near-term market direction, as capital flows and risk appetite are driven by developments in the US and other major economies.

“What happens outside of India is incredibly important,” Setalvad said.

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India–US trade deal may take time

Prashant Khemka, Founder of WhiteOak Capital, said expectations of a near-term India–US trade deal have weakened.

“I’d be happy if it is in this calendar year,” he said, adding that recent signals suggest a delay is possible.

Sectors to watch this year

Vikas Khemani, Founder of Carnelian Asset Management – that manages funds worth ₹9578.58 crore as of December 31, 2025 - said investors should focus on areas where earnings growth is visible.

He said non-banking financial companies (NBFCs) and public sector banks remain key areas to track.

Khemani also pointed to consumer discretionary stocks and information technology (IT) services as sectors that could perform better if order execution improves and currency trends remain supportive.

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