India's High-Growth Companies Set It Apart, Says Julius Baer's Mark Matthews
The domestic investor is the most important in India and will remain a very positive force, Matthews said.
Even as the Nifty 50 reached a key milestone by touching 20,000 on Sept. 11, two key factors differentiate India from its emerging markets peers, according to Mark Matthews.
India Inc. stands out with robust return-on-equity performance, consistently achieving high teens return on equity, Matthews, head of research, Asia at Julius Baer Group Ltd., said in an interview with BQ Prime's Niraj Shah. The figure significantly surpasses the emerging market average, which typically hovers around 10%, he said.
Secondly, India stands out due to its vibrant growth companies, which are expected to witness a doubling of earnings within five years, Matthews said.
"It's that combination of highly profitable companies and companies that have strong earnings growth that make it quite unique in the emerging space," he said.
India has established a strong track record, with compound annual returns over the past 10, 20, and 30 years, consistently reaching mid double-digits when measured in rupees, Matthews said.
Local investors recognise India as a reliable and profitable market for investment—a distinction that cannot be made for many other Asian markets, which have significantly underperformed in comparison, he said.
"The domestic investor, who I think is the most important in India, will remain a very positive force."
The Chandrayaan-3 mission and the G20 summit in Delhi were "genuinely front page" and very positive news for India, Matthews said.
Where To Put Money
Matthews advised investors to screen companies expected to achieve significant earnings growth over the next few years.
The approach is fairly sector-agnostic, according to him. "I suppose that we do have a kind of bias toward the financial sector, materials and consumers."
Matthews emphasised on exploring opportunities in any sector where high-growth companies can be identified.
