Thread by @_prashantnair

We spoke with S. Naren, CIO, ICICI Prudential AMC.

18 takeaways.

1. India best structural story with strong macros, challenge is to decide what kind of premium to pay

2. Big move since March on strong flows partly explained by Japanese CB printing a lot

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3. We are in a lower/moderate return environment, no longer in zero rate regime

4. You can invest in debt & get 4-5%, even Japan will quit printing at some point

5. Since March, it appears that markets go up in a straight line, won't be like this

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6. We will move into a moderate return environment

7. Next 3-5 years we will see a fair amount of volatility, better to have products which can switch b/w equity & debt

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8. Top end of premium consumption is in great shape, challenge is valuations, how to buy it ! Even if we don't buy now, won't sell either

9. We try and buy cos/sectors at the bottom of the cycle, but right now, nothing is at the bottom of the cycle

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10. Autos & new-age cos were underperformers last yr, even these have picked up

11. Some underperformance in IT & pharma. Would buy pharma which is a rare sector at bottom of the cycle

12. Not clear about impact ChatGPT etc on Indian IT services cos

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13. Consensus across foreign analysts that India is best structural story

14. Analysts have moved away from valuing companies based on earnings to valuing them on EV/EBITDA basis

15. Top Indian banks' lending safe, valuations very comfortable

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16. Like top banks, much easier to stay invested here, areas like microfinance, vehicle finance etc doing well but requires much more research

17. Power sector has reasonable valuations, a long cycle industry, power demand very robust over 3-5 years

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18. We own many new-age cos, assigned these companies to my younger more growth oriented colleagues, but have to stay balanced. Cannot say yes to everything...

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